Target Corp. (NYSE:TGT) grew its top and bottom lines at a blistering pace in the first quarter, with total revenue increasing by nearly 23% year-over-year to $24.2 billion, digital revenue climbing by 50% and adjusted earnings per share of $3.69 handily beating analysts’ median estimates of $2.20 a share.
The Minneapolis-based retailer reported operating income of $2.4 billion, up 407% from 2020 levels. Shares were up strongly in morning trading Wednesday amid a sharply down day for U.S. equities.
For the second quarter, which is roughly halfway over, the company said it expects mid- to high-single-digit growth in “comparable” sales, defined as sales generated at a store location compared to historical levels at that location. Operating margin rates, which quadrupled to 9.8% in the first quarter, will be well above the second-quarter 2019 rate of 7.2%, but not as high as the record 10% rate in the second quarter of 2020, Target said.
Revenue for same-day pickup and delivery services grew by more than 90%, while drive-up services revenue soared by 123%, Target said. More than 95% of Target’s total first-quarter sales were fulfilled by its stores. Target has 1,909 U.S. stores and 44 distribution centers. It is also constructing micro-fulfillment facilities adjacent to stores to support store and e-fulfillment operations.
On Monday, Target said it would launch same-day pickup, drive-up and delivery services for alcohol items. The option is now available for pickup or drive-up orders at over 1,200 stores across the country, Target said. By the end of May, same-day delivery will be available through its Shipt grocery fulfillment service at more than 600 stores.
Target’s results come the day after rival Walmart Inc. (NYSE:WMT) posted strong numbers for the first quarter of the company’s 2022 fiscal year.