Target Net Falls in Q4, Up for Fiscal Year
MINNEAPOLIS-Rising expenses trumped a gain in sales to push Target's fourth-quarter net income back by 2 percent, to $961 million.
The fourth-quarter total brought Target's net income for the fiscal year ending on Feb. 2 to $3 billion, up 2.4 percent over the prior year. Net sales in the quarter rose 6.8 percent to $22.4 billion, bringing the year's sales total to $72 billion, an increase of 5.1 percent over the previous year. Same-store sales edged up 0.4 percent in the quarter and 2.7 percent for the year.
Target's integrated growth strategies and markdowns on seasonal merchandise combined to cut its gross margin by 66 basis points in the quarter, to 27.8 percent. The bottom line also felt the impact of a gain of 9.1 percent in selling, general and administrative expense dollars and 39 basis points in SG&A as a percentage of sales, to 18.9 percent.
Gregg Steinhafel, Target's chairman, president and CEO, said the retailer's full-year results "position us well to deliver on significant plans in 2013, including completion of the largest store-opening program in our company's history, with 124 stores in Canada and additional Target and CityTarget locations in the U.S., investing in new processes and technology that will improve our guests' multichannel experience and closing the sale of our credit-card receivables."