Target(TGT) 海通国际·2025-03-17 10:56Investment Rating - The report indicates a neutral investment rating for Target, with expectations of flat same-store growth in 2025, taking into account multiple downside risks [1][11]. Core Insights - Target's 2025 same-store sales growth guidance is flat, primarily driven by customer traffic, and considers various downside risks such as adverse weather, consumer confidence issues, and potential job losses [1][11]. - The company reported a slight increase in same-store sales of 1.5% for Q4 2024, exceeding market expectations, with a customer traffic increase of 2.1% [2]. - Target's online business is performing positively, with 80% of revenues coming from online sales, and the drive-up and order pickup services are leading the industry [4][14]. Summary by Sections Financial Performance - In Q4 2024, Target's gross margin was 26.2%, slightly above expectations, despite a year-on-year decline of approximately 40 basis points due to increased online order costs and supply chain expenses [2]. - The company provided a fiscal year 2025 earnings per share (EPS) guidance of 9.80, which is below market expectations [2]. Supply Chain and Imports - Target is the second-largest retail importer in the U.S., with the share of imports from China expected to decrease from 30% to 25% by the end of 2025 [3][12]. - Approximately 50% of Target's supply comes from the U.S., with 25-30% sourced from other countries [3][12]. Product Categories and Margins - The cosmetics and apparel categories are gaining market share, while the home category is expected to see marginal improvements [7][15]. - Target is focusing on enhancing its private label offerings, with over 75% of revenue from private labels in apparel and home categories [15][18]. Inventory Management - Target's inventory increased by 7% year-on-year in Q4 2024, attributed to the introduction of new products and fluctuations in receipt timing [8][19]. - The company plans to optimize its supply chain to address out-of-stock situations in popular categories like toys and home goods [19].