Target Corporation stock research
FY2023 Q2
Target (TGT) Gross Margin — Quarter Ended Jul 29, 2023
Revenue was lower than both the prior quarter and the same quarter last year. However, gross profit increased and cost of revenue decreased, leading to an improved gross margin compared to both periods.
Gross margin takeaway
Quarter ended Jul 29, 2023 · FY2023 Q2
Revenue was lower than both the prior quarter and the same quarter last year. However, gross profit increased and cost of revenue decreased, leading to an improved gross margin compared to both periods.
- The primary observable factor in the margin improvement was the decrease in cost of revenue, which fell more sharply than revenue, allowing gross profit to rise.
- Compared to the prior quarter, gross margin strengthened as revenue decreased but cost of revenue decreased even more. Versus the same quarter a year ago, gross margin improved substantially, driven by a larger decline in cost of revenue relative to revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
28.2%
Gross profit
$7.0B
Revenue
$24.8B
Cost of revenue
$17.8B
Quarter-over-quarter change
+0.8 pts
Year-over-year change
+5.5 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% |
| Jul 29, 2023 | $24.8B | $7.0B | $17.8B | 28.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 29, 2023
+0.8 pts
Year-over-year change
Jul 30, 2022
+5.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable factor in the margin improvement was the decrease in cost of revenue, which fell more sharply than revenue, allowing gross profit to rise.
Compared to the prior quarter, gross margin strengthened as revenue decreased but cost of revenue decreased even more. Versus the same quarter a year ago, gross margin improved substantially, driven by a larger decline in cost of revenue relative to revenue.
Monitor the trajectory of cost of revenue, as its movement relative to revenue has been the key factor in gross margin changes.