The news: Target beat analysts’ expectations for the first time in the year as it generated a profit of $1.89 per share in Q4, significantly outpacing the $1.48 predicted by Wall Street thanks in part to its ability to use steep discounts to push past some of the inventory glut that marred its results earlier in the year.
But despite those stronger-than-expected results, the retailer offered conservative guidance of comparable sales having “low-single-digit decline to a low-single-digit increase” for fiscal 2023.
Slowing growth: Target is the latest in a series of retailers that expect sales growth to slow this year as consumers pull back on discretionary spending.
Target’s advantages: Despite the challenging environment, Target has several factors working in its favor in the year ahead:
The big takeaway: Target is showing signs of fixing the inventory glut that hurt its results over much of the past year and has begun shifting its product mix to better meet consumer demand. That should put Target in a solid position to navigate a difficult environment this year.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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