What: Target revealed earnings, increasing top-line revenues but falling short on profits due to continued pandemic-related headwinds.

Why is it important: Total revenues for the three-month period ending April 30, were USD25.1 billion, up from USD24.1 billion a year ago. Comparable sales grew 3.3% during the quarter, year-over-year, on top of 22.9% growth last year, while guest traffic rose 3.9% during the quarter, thanks to strength in food and beverage, beauty, and household essentials. Same-day services, which include buying online, pick up in stores, drive-up, and Target’s delivery service Shipt, accounted for more than half of digital sales growth.

Excess inventory and higher freight and transportation costs lead to reduced earnings per share. Target’s first-quarter GAAP earnings per share fell 48.2% to USD2.16, down from USD4.17 the same time last year. The company logged just over $1 billion in profits, as a result, down from USD2.09 billion during 2021’s first quarter.

Target ended the quarter with 1,933 stores, in addition to its e-commerce business, USD1.1 billion in cash and cash equivalents, and roughly USD13.3 billion in long-term debt.

Target’s declining profits