Target Corp ( TGT ) shares are trading higher after it reported fourth-quarter FY23 revenue growth of 1.7% year-on-year to $31.92 billion, beating the analyst consensus estimate of $31.83 billion.

Comparable sales declined 4.4% in the fourth quarter, reflecting comparable store sales declines of 5.4% and comparable digital sales decline of 0.7%.

Gross margin for the quarter expanded by 290 basis points to 25.6%. The gross margin rate reflected lower markdowns and other inventory-related costs, lower freight costs, lower supply chain and digital fulfillment costs, and favorable category mix.

Operating income margin rate of 5.8% was 210 basis points higher than last year, and the operating income for the quarter shot up by 60.9% to $1.86 billion.

Adjusted EPS of $2.98 beat the analyst consensus estimate of $2.42.

The company held $3.8 billion in cash and equivalents as of February 3, 2024. Operating cash flow for twelve months totaled $8.6 billion.

The company paid dividends of $508 million in the fourth quarter, compared with $497 million last year.

As of the quarter end, Target ( TGT ) had approximately $9.7 billion remaining capacity under the prior August 2021 repurchase program. The company did not repurchase any shares in the fourth quarter of 2023.

“Our team’s efforts changed the momentum of our business, further improving our sales and traffic trends in the fourth quarter while driving profitability well ahead of expectations,” said Brian Cornell, chairman and CEO of Target ( TGT ).

Outlook: Target ( TGT ) sees FY24 adjusted EPS of $8.60 – $9.60 against the Street view of $9.14; expects 0% – 2% growth in comparable sales.

Target ( TGT ) sees first quarter adjusted EPS of $1.70 – $2.10 versus the estimate of $2.09; comparable sales decline of (3)% – (5%).

Price Action: TGT shares are trading higher by 8.25% at $162.90 in premarket on the last check Tuesday.