Target Corporation reportedly disclosed sizable quarterly earnings on Tuesday (1st March) and anticipates a big improvement in its 2022 figures, exceeding expectations. With supply chain pressures slated to be relaxed in the coming months, shares of the big-box department store chain elevated 14%.
It is worth noting that Target intends to invest USD 5 billion this year to expand its mid-size outlets, modernize some existing ones, and strengthen its online practices to uphold the current sales impetus.
Notably, many large retailers have been making heavy investments in strengthening their market position and hiring more employees to hasten shipment as well as to ensure an abundant supply of inventory, as margins remain a primary focus in these challenging circumstances.
Target CEO Brian Cornell stated that supply chain restrictions are easing now that the pandemic was on the wane, but it appears that it will take more time while the future will continue to remain uncertain given the ongoing Ukraine crisis.
The company has asserted that they expect profits to rise remarkably as sales from new online options enabled by same-day delivery represent a profound step forward. This aspect of Target’s business, which allows customers to go to a store and pick up goods and have them delivered within hours, grew by 45% in 2021.
Sources claimed that Target is predicting relatively low revenue growth in 2022, in line with analysts' predictions of a 2.18% increase, while adjusted profits should rise by a huge single-digit percentage and surpass expectations.
However, Target has also indicated that raising prices for the consumers will be their last resort to counteract price hikes.
During the pandemic, retail chains such as Target and Walmart witnessed substantial growth in sales, as these corporations are capitalizing on those gains. These retailing behemoths are also expanding the customer base by making deals with suppliers to outbid smaller players through competitive pricing.
Source credit: