Table of Contents
MINNEAPOLIS — Target had another good year in 2021. The company delivered $106 billion in total revenue for the year, having grown nearly $28 billion, or more than 35%, over the past two years. Comparable sales grew 12.7%, on top of a 19.3% increase in 2020.
Target also said that earnings per share in the fourth quarter established an all-time high with GAAP EPS of $3.21 and adjusted EPS of $3.19, despite the company’s significant investments in team, price, and inventory availability.
Brian Cornell, Target
“Our strong fourth-quarter performance capped off a year of record growth in 2021, reinforcing the durability of our business model and our confidence in long-term profitable growth,” Target chairman and CEO Brian Cornell said. “As we look ahead, we’ll keep investing and delivering on all that has earned the loyalty and trust of our guests; that starts with our outstanding team and includes continued differentiation through affordability, assortment, ease and convenience.”
Target’s total comparable sales grew 8.9% in the fourth quarter, reflecting comparable stores sales growth of 8.9% and digital sales growth of 9.2%. Total revenue of $31.0 billion grew 9.4% compared with last year, driven by sales growth of 9.4% and an 11.1% increase in other revenue. Operating income was $2.1 billion in fourth quarter 2021, up 14.1% from $1.8 billion in 2020.
Fourth quarter operating income margin rate was 6.8% in 2021 compared with 6.5% in 2020. Fourth quarter gross margin rate was 25.7%, compared with 26.8% in 2020, reflecting pressure from increased supply chain costs due to increased compensation and headcount in the company’s distribution centers as well as higher freight and merchandising costs. Fourth quarter SG&A expense rate was 17.9% in 2021, compared with 19.2% in 2020, reflecting the benefit of leverage resulting from strong revenue growth.
Full-year sales increased 13.2% to $104.6 billion from $92.4 billion last year, reflecting a 12.7% increase in comparable sales combined with sales from non-mature stores. Full-year revenue of $106 billion grew 13.3% compared with 2020, reflecting sales growth of 13.2% and a 20.2% increase in other revenue.
Full-year operating income was $8.9 billion in 2021, an increase of 36.8% from $6.5 billion last year. Full-year gross margin rate was 28.3%, in line with 28.4% in 2020, reflecting pressure from increased supply chain, merchandise, and freight costs largely offset by favorable category mix and lower markdowns. the full-year SG&A expense rate was 18.6% in 2021, compared with 19.9% in 2020, reflecting significant leverage on fixed costs that offset investments in team member pay and benefits.
For fiscal year 2022, Target expects low- to mid-single digit revenue growth, an operating margin rate of 8% or higher, low-single digit growth in operating margin dollars, and high-single digit growth in adjusted earnings per share.
The company expects quarterly, year-over-year profit performance will be variable during the year, and generally improve as the year progresses. Target forecasts that its first quarter 2022 operating margin rate will be favorable in relation to historical performance, but well below its first quarter 2021 rate of 9.8%.
