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Target doubles employee bonuses as profits recover

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A Target store in New York, United States, Monday, March 4, 2024.

Shelby Knowles | Bloomberg | Getty Images

Target to double employee bonuses this year as big-box retailer’s profits recover from near bumpy high a period of two years.

The Minneapolis-based retailer’s salaried employees receive an annual bonus, based on Target’s performance and the eligible amount set as part of their compensation. Retailer will pay 100% of employees’ eligible annual bonus amounts for the most recent fiscal year, a company spokesperson said Thursday. This is an increase from 50% the previous year.

In a statement, Target said the annual bonus payout was based on the retailer’s performance against sales and profit goals set at the beginning of the fiscal year.

“Based on Target’s performance in 2023, including the $2 billion in incremental profit growth our team delivered that exceeded the goals we set at the start of the year, we are rewarding our team accordingly “, the company’s press release said.

Target will pay the annual cash bonuses at the end of March. However, the amount paid will not be as high as it could be. It reaches 175% of the eligible bonus amount of each employee.

The vast majority of Target’s approximately 415,000 employees, like those in its stores and warehouses, are paid hourly and are not eligible for bonuses. Still, it offers bonuses to store and supply chain executives, as well as many corporate employees. Target’s top executives have a different bonus structure.

The increase in bonus payout was first reported by Bloomberg.

Target faced a difficult nearly two-year period marked by inventory issuesweaker discretionary spending, inflated supply chain costs and higher levels of theft. During the holiday quarter, Target’s comparable sales down for the third consecutive quarterand its online sales also fell compared to the year-ago period.

The discounter said it expects sales difficulties to continue. For full year 2024, Target said it expects comparable sales to remain flat or even up 2%.

But the company improved its profits and margins as Target continued to focus more on its inventory and some of its costs, like freight, declined. For the fiscal year, Target said it expects adjusted earnings per share to be between $8.60 and $9.60. The upper end of this range would be higher the adjusted earnings per share of $8.94 it reported for the prior fiscal year.

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