Target Corporation stock research
FY2023 Q3
Target (TGT) Gross Margin — Quarter Ended Oct 28, 2023
Revenue was lower than the same quarter last year but higher than the prior quarter. Gross profit increased compared to both periods, as cost of revenue decreased year-over-year and rose only modestly sequentially, resulting in an improved gross margin.
Gross margin takeaway
Quarter ended Oct 28, 2023 · FY2023 Q3
Revenue was lower than the same quarter last year but higher than the prior quarter. Gross profit increased compared to both periods, as cost of revenue decreased year-over-year and rose only modestly sequentially, resulting in an improved gross margin.
- The most notable margin driver was the year-over-year reduction in cost of revenue, which outpaced the decline in revenue, leading to a higher gross profit and gross margin.
- Compared to the prior quarter, revenue and cost of revenue both increased, but gross profit grew at a faster rate, yielding a slightly higher gross margin. Versus the same quarter last year, revenue decreased while cost of revenue decreased more substantially, producing a significantly higher gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
28.5%
Gross profit
$7.2B
Revenue
$25.4B
Cost of revenue
$18.1B
Quarter-over-quarter change
+0.4 pts
Year-over-year change
+2.8 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% |
| Oct 28, 2023 | $25.4B | $7.2B | $18.1B | 28.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 29, 2023
+0.4 pts
Year-over-year change
Oct 29, 2022
+2.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most notable margin driver was the year-over-year reduction in cost of revenue, which outpaced the decline in revenue, leading to a higher gross profit and gross margin.
Compared to the prior quarter, revenue and cost of revenue both increased, but gross profit grew at a faster rate, yielding a slightly higher gross margin. Versus the same quarter last year, revenue decreased while cost of revenue decreased more substantially, producing a significantly higher gross margin.
Monitor the trend in cost of revenue relative to sales, as it has been a key factor in margin changes.