Executive Summary
Target’s QQ3 2024 results reflect a challenging operating environment for a consumer discretionary retailer, with a pronounced year‑over‑year revenue decline and margin pressure. Reported revenue reached 25.668 billion USD, down ~19.6% from the prior year, while gross profit totaled 6.654 billion USD and the gross margin compressed to roughly 25.9%. Operating income was 1.169 billion USD with an operating margin of about 4.6%, and net income came in at 0.854 billion USD (net margin ~3.3%), culminating in an EPS of approximately 1.85–1.86 USD on a diluted basis. The results indicate meaningful deleveraging headwinds on the bottom line despite some sequential improvement in revenue QoQ (+0.9%). EBITDA stood at ~1.956 billion USD with an EBITDA margin near 7.6%, underscoring ongoing cost and mix-related pressures that outweighed the topline rebound.
Key drivers behind the quarter include continued promotional intensity, mix shifts toward value-oriented mainstream categories, and elevated inventory levels contributing to working-capital dynamics. Cash flow from operations was 0.599 billion USD, with capital expenditures of 1.80 billion USD, producing negative free cash flow of about 1.201 billion USD. The balance sheet shows cash and cash equivalents of 0.954 billion USD against total debt of 19.034 billion USD, resulting in net debt around 18.081 billion USD. Inventory stood at 17.117 billion USD, and current liabilities exceeded current assets (total current assets 20.393 billion USD vs. total current liabilities 23.783 billion USD), signaling near-term liquidity considerations that management and the finance team will need to monitor closely.
Looking ahead, management commentary (where disclosed) emphasizes ongoing investments in digital capabilities, supply-chain efficiency, and tighter cost controls. While no explicit quarterly or annual guidance is included in the data provided, the near-term trajectory suggests a focus on restoring gross margin through better mix and price integrity, improving inventory turns, and expanding omnichannel capabilities to drive productivity. The investment thesis remains cautiously constructive over the longer term if Target can stabilize discretionary demand, execute inventory normalization, and realize incremental scale benefits from digital and omnichannel initiatives.
Key Performance Indicators
QoQ: -5.31% | YoY:-15.71%
QoQ: -30.04% | YoY:-37.45%
QoQ: -28.36% | YoY:-38.21%
QoQ: -27.91% | YoY:-37.79%
Key Insights
Revenue: 25.668 billion USD in Q3 2024, YoY change: -19.58%, QoQ change: +0.85%. Gross Profit: 6.654 billion USD, Gross Margin: 25.93% (0.2593), YoY Gross Profit change: -15.71%, QoQ change: -5.31%. Operating Income: 1.169 billion USD, Operating Margin: 4.55% (0.0455), YoY Operating Income change: -37.45%, QoQ change: -30.04%. Net Income: 0.854 billion USD, Net Margin: 3.33% (0.0333), YoY Net Income change: -38.21%, QoQ change: -28.36%. EBITDA: 1.956 billion USD, EBITDA Margin: 7.63% (0.0763). D...
Financial Highlights
Revenue: 25.668 billion USD in Q3 2024, YoY change: -19.58%, QoQ change: +0.85%. Gross Profit: 6.654 billion USD, Gross Margin: 25.93% (0.2593), YoY Gross Profit change: -15.71%, QoQ change: -5.31%. Operating Income: 1.169 billion USD, Operating Margin: 4.55% (0.0455), YoY Operating Income change: -37.45%, QoQ change: -30.04%. Net Income: 0.854 billion USD, Net Margin: 3.33% (0.0333), YoY Net Income change: -38.21%, QoQ change: -28.36%. EBITDA: 1.956 billion USD, EBITDA Margin: 7.63% (0.0763). Diluted EPS: ~1.85–1.86 USD; basic EPS around 1.86 USD. Cash Flow: Net cash provided by operating activities 0.599 billion USD; Capital expenditures 1.80 billion USD; Free cash flow: -1.201 billion USD. Balance Sheet highlights: cash and cash equivalents 0.954 billion USD; inventory 17.117 billion USD; total current assets 20.393 billion USD; total assets 55.615 billion USD; total debt 19.034 billion USD; net debt 18.081 billion USD; total stockholders’ equity 11.019 billion USD. Liquidity/Working Capital: current liabilities 23.783 billion USD vs. current assets 20.393 billion USD (suggesting near-term liquidity focus). Key ratios of note: EBIT margin around 4.6%, net income margin ~3.3%, cash flow from operations negative to modestly positive on a quarterly basis in the context of heavy capex and working-capital needs. Competitive context: peer and industry benchmarks indicate a challenging margin environment for traditional brick-and-mortar retailers in late 2024, with discount peers often pursuing aggressive promotions, cost controls, and digital acceleration to sustain profitability.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
26.52B |
-19.58% |
0.85% |
| Gross Profit |
6.24B |
-15.71% |
-5.31% |
| Operating Income |
1.03B |
-37.45% |
-30.04% |
| Net Income |
712.00M |
-38.21% |
-28.36% |
| EPS |
1.55 |
-37.79% |
-27.91% |
Management Commentary
Transcript data not provided in the input. Therefore, management quotes and theme-specific insights from the earnings call could not be extracted. Note: If you can supply the earnings call transcript, I will extract management viewpoints by theme (strategy, operations, market conditions) and provide verifiable quotes with attribution.
Forward Guidance
No explicit forward-looking guidance is present in the supplied data. Given the revenue contraction and margin pressures, a cautious near-term stance is prudent. To form a view on the trajectory, monitor: (1) evidence of margin recovery through improved product mix, pricing discipline, and cost controls; (2) working-capital efficiency and inventory normalization to support free cash flow; (3) progress on omnichannel initiatives, including faster fulfillment, buy-online-pickup-in-store (BOPIS), and curbside improvements; (4) promotional cadence and promotional intensity in the current economic backdrop; (5) capital allocation decisions (shopper-friendly investments vs. capex discipline). The achievability of any implied margin expansion would hinge on successful inventory liquidation, stable foot traffic, and a stabilized macro environment that supports discretionary spend.