US-based department store chain Target has reported total revenue of $26bn for the second quarter (Q2) of the fiscal year 2022 (FY22), which ended on 30 July.

The figure represents a 3.5% increase from $25.1bn recorded a year earlier, driven by a total sales growth of 3.3% and a 14.8% rise in other revenues.

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Despite this, Target’s operating income fell by 87% from $2.5bn in Q2 2021 to $321m in Q2 2022 due to a decline in the company’s gross margin rate.

The company’s operating income margin rate was 1.2% in the quarter, compared with 9.8% reported in the prior-year period.

Target’s generally accepted accounting principles-based (GAAP) earnings per share (EPS) stood at $0.39, compared with $3.65 in Q2 2021.

The retailer’s adjusted EPS was down by 89.2% to $0.39, while its comparable sales increased by 2.6%.

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According to Target, this was driven by a 1.3% increase in comparable store sales, as well as a 9% growth in comparable digital sales.

Target chairman and CEO Brian Cornell said: “I’m really pleased with the underlying performance of our business, which continues to grow traffic and sales while delivering broad-based unit-share gains in a very challenging environment.

“I want to thank our team for their tireless work to deliver on the inventory rightsizing goals we announced in June.

“While these inventory actions put significant pressure on our near-term profitability, we’re confident this was the right long-term decision in support of our guests, our team and our business.

“Looking ahead, the team is energised and ready to serve our guests in the back half of the year, with a safe, clean, uncluttered shopping experience, compelling value across every category, and a fresh assortment to serve our guests’ wants and needs.”

For the second half (H2) of FY22, Target expects its operating margin rate to be around 6%.