MINNEAPOLIS, May 22, 2024 /PRNewswire/ --  First quarter operating income margin rate of 5.3 percent reflects a 140 basis point improvement in gross margin rate as compared to the prior year. First quarter comparable sales declined 3.7 percent, in line with expectations. Digital comparable sales grew 1.4 percent. Same-day services grew nearly 9 percent, led by more than 13 percent growth in Drive Up. Sales declines, primarily in discretionary categories, were partially offset by continued growth in Beauty. Discretionary sales trends continued to improve vs. prior quarters, led by an improvement of nearly 4 percentage points in apparel as compared to Q4 of 2023. The Company successfully relaunched its free-to-join Target Circle loyalty program in April, and welcomed more than 1 million new members to the platform in the first quarter. Inventory at the end of Q1 was 7 percent lower than last year, even as the Company saw higher in-stock levels than a year ago. For additional media materials, please visit:https://corporate.target.com/news-features/article/2024/05/q1-2024-earnings Target Corporation (NYSE:TGT) today announced its first quarter 2024 financial results, which reflected sales and profit performance consistent with the Company's previously provided expectations. The Company reported first quarter GAAP and Adjusted earnings per share1 (EPS) of $2.03, compared with $2.05 in 2023. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS. 1Adjusted EPS, a non-GAAP financial measure, excludes the impact of certain discretely managed items. See the tables of this release for additional information about the items that have been excluded from Adjusted EPS. "Our first quarter financial performance was in line with our expectations on both the top and bottom line, tracking the trajectory we outlined for this year and setting up a return to growth in the second quarter," said Brian Cornell, chair and chief executive of Target Corporation. "Our topline performance improved for the third consecutive quarter, with growth in our digital business led by strength in our same-day fulfillment services. Consumers continue to respond to the newness and value that we offer across our shopping experience, and we're pleased with early results from the relaunch of Target Circle. Looking ahead, our team will deliver for our guests through lower prices, a seasonally relevant assortment, ease and convenience, as we keep investing in our strategy and efficiency initiatives to get back to growth and deliver on our longer-term financial goals." Guidance For the second quarter, the Company expects a 0 to 2 percent increase in its comparable sales, and GAAP and Adjusted EPS of $1.95 to $2.35. For the full year, the Company continues to expect a 0 to 2 percent increase in its comparable sales, and GAAP and Adjusted EPS of $8.60 to $9.60. Operating Results Comparable sales declined 3.7 percent in the first quarter, reflecting a comparable store sales decline of 4.8 percent partially offset by a comparable digital sales increase of 1.4 percent. Total revenue of $24.5 billion was 3.1 percent lower than last year, reflecting a total sales decline of 3.2 percent and a 3.9 percent increase in other revenue. First quarter operating income of $1.3 billion was 2.4 percent lower than last year, driven by lower sales volume. First quarter operating income margin rate was 5.3 percent in 2024, compared with 5.2 percent in 2023. First quarter gross margin rate was 27.7 percent, compared with 26.3 percent in 2023, reflecting the net impact of merchandising activities, including cost improvements that more than offset higher promotional markdown rates, combined with favorable category mix and lower book to physical inventory adjustments as compared to the prior year.  First quarter SG&A expense rate was 21.1 percent in 2024, compared with 19.8 percent in 2023, reflecting the combined impact of lower sales and higher costs, including continued investments in pay and benefits and marketing, partially offset by disciplined cost management. Interest Expense and Taxes The Company's first quarter 2024 net interest expense was $106 million, compared with $147 million last year, primarily driven by an increase in interest income reflecting higher cash balances year-over-year. First quarter 2024 effective income tax rate was 22.7 percent, compared with the prior year rate of 21.1 percent, reflecting lower discrete benefits as compared to the prior year. Capital Deployment and Return on Invested Capital The Company paid dividends of $508 million in the first quarter, compared with $497 million last year, reflecting a 1.9 percent increase in the dividend per share. The Company did not repurchase any stock in the first quarter.  As of the end of the quarter, the Company had approximately $9.7 billion of remaining capacity under the repurchase program approved by Target's Board of Directors in August 2021. For the trailing twelve months through first quarter 2024, after-tax return on invested capital (ROIC) was 15.4 percent, compared with 11.4 percent for the trailing twelve months through first quarter 2023. The increase in ROIC reflects higher operating income, partially offset by higher average invested capital. The tables in this release provide additional information about the Company's ROIC calculation. Webcast Details Target will webcast its first quarter earnings conference call at 7:00 a.m. CT today. Investors and the media are invited to listen to the meeting at Corporate.Target.com/Investors (click on "Q1 2024 Target Corporation Earnings Conference Call" under "Events & Presentations"). A replay of the webcast will be provided when available. The replay number is 1-800-513-1169. Miscellaneous Statements in this release regarding the Company's future financial performance, including its fiscal 2024 second quarter and full-year guidance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the Company's results to differ materially. The most important risks and uncertainties are described in Item 1A of the Company's Form 10-K for the fiscal year ended February 3, 2024. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement. About Target Minneapolis-based Target Corporation (NYSE:TGT) serves guests at nearly 2,000 stores and at Target.com, with the purpose of helping all families discover the joy of everyday life. Since 1946, Target has given 5% of its profit to communities, which today equals millions of dollars a week. Additional company information can be found by visiting the corporate website (corporate.target.com) and press center.   TARGET CORPORATION   Consolidated Statements of Operations Three Months Ended (millions, except per share data) (unaudited) May 4, 2024 April 29, 2023 Change Sales $       24,143 $       24,948 (3.2) % Other revenue 388 374 3.9 Total revenue 24,531 25,322 (3.1) Cost of sales 17,449 18,386 (5.1) Selling, general and administrative expenses 5,168 5,025 2.8 Depreciation and amortization (exclusive of depreciation included in cost of sales) 618 583 6.2 Operating income 1,296 1,328 (2.4) Net interest expense 106 147 (27.8) Net other income (29) (23) 26.9 Earnings before income taxes 1,219 1,204 1.3 Provision for income taxes 277 254 9.0 Net earnings $            942 $            950 (0.8) % Basic earnings per share $           2.04 $           2.06 (1.0) % Diluted earnings per share $           2.03 $           2.05 (1.0) % Weighted average common shares outstanding Basic 462.2 460.9 0.3 % Diluted 463.9 462.9 0.2 % Antidilutive shares 1.6 1.2 Dividends declared per share $           1.10 $           1.08 1.9 %   TARGET CORPORATION   Consolidated Statements of Financial Position (millions, except footnotes) (unaudited) May 4, 2024 February 3, 2024 April 29, 2023 Assets Cash and cash equivalents $             3,604 $             3,805 $             1,321 Inventory 11,730 11,886 12,616 Other current assets 1,744 1,807 1,836 Total current assets 17,078 17,498 15,773 Property and equipment Land 6,544 6,547 6,493 Buildings and improvements 37,587 37,066 35,198 Fixtures and equipment 8,341 8,765 7,473 Computer hardware and software 3,265 3,428 3,067 Construction-in-progress 1,538 1,703 2,822 Accumulated depreciation (24,161) (24,413)