Target (NYSE: $TGT), a leading general merchandise retailer, released its Q4 fiscal 2024 earnings report on Tuesday, March 4, 2025, before markets opened to a tepid market reaction. Let us take a deep dive into Target’s results.
Target Releases Q4 Results
For the fourth quarter of fiscal year 2024, Target reported a revenue of $30.92 billion, beating forecasts of $30.77 billion. However, revenue was down 3.1% year-over-year. The company reported a non-GAAP EPS of $2.41, beating the analysts’ estimate of $2.25 by 7.15% but down 19.3% YoY.
Other Q4 Highlights
Target reported a 1.5% increase in total comparable sales, driven by strong digital and traffic performance. Digital comparable sales were up 8.7% in Q4, with same-day delivery, powered by Target Circle 360TM up 25% YoY.
Full-Year Highlights
Full-year revenue was up 0.8% YoY to 106.57 billion, while full-year adjusted EPS was down 0.9% YoY to $8.86. Comparable sales were up 0.1% in fiscal 2024, driven by a 1.4% increase in traffic YoY, reflecting growth in both store and digital channels.
Target stated that its ongoing efficiency efforts had delivered over $2 billion in cost savings over the past two years. Commenting on the results, CEO Brain Cornell said, “Our team grew traffic and delivered better-than-expected sales and profitability in our biggest quarter of the year.”
Other Performance Highlights
Q4 operating income margin came in at 4.7% compared to 5.8% in Q4 2023. Meanwhile, Q4 gross margin was 26.2%, compared to 26.6% in q4 2023, driven by higher promotional costs, and clearance markdown rates.
Full-year operating income was $5.6 billion, a 2.5% decline from the $5.7 billion reported last year. Meanwhile, the full-year gross margin was 28.2%, compared to 27.5% in fiscal 2023.
Q4 SG&A expense rate came in at 19.4%, compared to 18.8% in Q4 2023. Full-year SG&A expense rate came in at 20.6%, compared to 20% in fiscal 2023. These increases were driven by higher costs, including continued investments in benefits, and pay. The company ended fiscal 2024 with $4.76 billion in cash and cash equivalents compared to $3.81 billion last year.
Share Buybacks And Dividend
Target paid dividends of $513 million in Q4, a 1.8% YoY increase. It also bought back $506 million worth of shares in Q4 at an average price of $136.80 per share. As of the end of Q4, it had around $8.7 billion remaining under its ongoing share buyback program approved in August 2021.
The company stated that for the trailing twelve months through Q4 fiscal 2024, the ROI in invested capital was 15.4%, compared to 16.1% the previous year. The decline was driven by lower profitability and a rise in average invested capital.
Target (TGT) Market Performance
Following the YoY revenue decline, TGT shares declined 1.87% in premarket trading to $118.50 as of 8:12 AM EST on March 4, 2025. Over the past six months, TGT shares have declined 20.45%, while over the past 12 months, the shares are down 22.24%.
As of Tuesday’s closing, of $120.76, TGT shares are trading below both the 50, and 200-day moving averages of $133.31, and $144.04, respectively.
Analysts give TGT shares a moderate buy forecast, with a wide range of forecasts that include a high of $188.00 and a low of $131.00. Their average price target of $149.32 represents a 23.65% upside based on Tuesday’s closing price.
Should You Add Target Shares To Your Portfolio in 2025?
While Target has struggled to generate growth in recent quarters, its fundamentals are still solid. It remains profitable and is generating free cash flow. There is no looming near-term danger to its fundamentals, and it has a respectable dividend yield of 3.71%.
Its business model is highly impacted by short-term, macroeconomic factors such as Trump’s planned tariffs, and the overall economic growth. However, as part of a long-term investment portfolio, TGT shares could potentially deliver gains.
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