Target Corporation stock research
FY2023 Q1
Target (TGT) Gross Margin — Quarter Ended Apr 29, 2023
Revenue was slightly higher than the same quarter last year, while cost of revenue was slightly lower, resulting in a higher gross profit and an improved gross margin. Compared to the prior quarter, revenue decreased but gross margin increased significantly as cost of revenue declined proportionally more.
Gross margin takeaway
Quarter ended Apr 29, 2023 · FY2023 Q1
Revenue was slightly higher than the same quarter last year, while cost of revenue was slightly lower, resulting in a higher gross profit and an improved gross margin. Compared to the prior quarter, revenue decreased but gross margin increased significantly as cost of revenue declined proportionally more.
- The gross margin rate improved compared to both the prior quarter and the year-ago quarter, with the most notable change being the reduction in cost of revenue as a proportion of revenue.
- Compared to the immediately preceding quarter, revenue was lower but gross margin was higher, as cost of revenue decreased more sharply. Relative to the same quarter one year earlier, revenue was essentially flat, while gross profit and gross margin both improved slightly.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
27.4%
Gross profit
$6.9B
Revenue
$25.3B
Cost of revenue
$18.4B
Quarter-over-quarter change
+3.9 pts
Year-over-year change
+0.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jan 28, 2023 | $31.4B | $7.4B | $24.0B | 23.5% |
| Apr 29, 2023 | $25.3B | $6.9B | $18.4B | 27.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jan 28, 2023
+3.9 pts
Year-over-year change
Apr 30, 2022
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin rate improved compared to both the prior quarter and the year-ago quarter, with the most notable change being the reduction in cost of revenue as a proportion of revenue.
Compared to the immediately preceding quarter, revenue was lower but gross margin was higher, as cost of revenue decreased more sharply. Relative to the same quarter one year earlier, revenue was essentially flat, while gross profit and gross margin both improved slightly.
Monitor the company's capital allocation strategy and cash position, as outlined in the management discussion, given the current financial results.