Business

Norwegian Cruise Line’s stock fell over 10% after posting weaker-than-expected guidance for the year.
The company reported losses that were wider than Wall Street expected, but it beat on revenue.
Norwegian expects its struggled with high debt loads and costs to continue in the first half.

A view of the Norwegian Encore cruise ship during its inaugural sailing from PortMiami, which took place from Nov. 21-24, 2019.
Orlando Sentinel | Tribune News Service | Getty Images

Norwegian Cruise Line shares fell more than 10% on Tuesday after the company posted wider losses than expected and offered soft guidance for the year, despite persistent travel demand.
The cruise company reported fourth quarter losses of $1.04 per share, more than analysts’ estimates of 85 cents.

Norwegian is also projecting full-year earnings per share of 70 cents in 2023, well below expectations of $1.04. The guidance comes as the company struggles to reduce the costs and debt weighing down the business. Norwegian had $13.6 billion in debt as of Dec. 31.
As Norwegian tries to climb back to profitability, it didn’t offer much confidence for the first half of 2023.
CEO Frank Del Rio said the company’s first 2023 quarter “will be the highest cost quarter,” but added that the second half will be better. Norwegian is projecting losses of 45 cents per share in the first quarter, 10 cents higher than Wall Street had anticipated.
Norwegian said its costs continue to rise, exacerbated by inflation, even as it returns more ships to service. Del Rio did not rule out an equity raise to manage debt, but he said it wouldn’t be “prudent to issue more equity to de-lever the company,” even though “there’s a lot of work to do.”
Strong demand is giving the company hope it can ride out the difficulties.

“We’ve seen very, very strong record – near record booking levels dating back to November,” said Del Rio. “So we simply don’t see a weakening consumer.”
Norwegian has lagged behind its competitors, although others are still posting losses as the industry battles higher fuel prices and interest rates.
Royal Caribbean saw its stock jump after posting narrower than expected fourth quarter losses and bookings earlier in February. Morgan Stanley had upgraded the rival company in January, naming it the “superior cruise operator” coming out of the pandemic.
–CNBC’s Seema Mody contributed to this report.

WATCH LIVEWATCH IN THE APP More

Virgin Galactic reported fourth-quarter results on Tuesday.
The company said it remains on track to resume spaceflights in the coming months.
The company reported quarterly losses roughly in line with its previous quarter.

An aerial view of carrier aircraft VMS Eve, left, and spacecraft VSS Unity, at Spaceport America in New Mexico on Feb. 27, 2023.
Virgin Galactic

Virgin Galactic said on Tuesday it remains on track to resume spaceflights in the coming months after completing upgrades to its carrier aircraft and spacecraft.
The update came alongside the company’s fourth-quarter results, which showed losses roughly in line with its previous quarter.

“Our near-term objective for commercial spaceline operations is to safely deliver recurring flights with our current ships while providing an unrivaled experience for private astronauts and researchers,” Virgin Galactic CEO Michael Colglazier said in a statement.
The space tourism company stuck to its goal of conducting its next spaceflights in the second quarter of this year, after a lengthy hiatus dating back to summer 2021. During that period Virgin Galactic conducted a variety of repairs and enhancements to its jet-powered mothership, called VMS Eve.
Earlier this month, the company flew two validation flight tests with VMS Eve and relocated it, from its manufacturing facility in California’s Mojave to Spaceport America in New Mexico.

Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

Next up are a series of tests, starting with attaching the spacecraft VSS Unity to the carrier aircraft while on the ground, to demonstrate work done to reinforce the pylon in the center of VMS Eve’s wing was successful. Then Virgin Galactic will conduct glide tests, where VMS Eve carries the spacecraft and releases it, before a test spaceflight with a full company crew onboard.
After that, the company’s first commercial flight is expected to carry members of the Italian Air Force, before moving on to flights from its backlog of private-paying customers.

For the fourth quarter, the company reported an adjusted EBITDA loss of $133 million, compared with a loss of $65 million a year ago, with negligible revenue. The company has about $980 million in cash on hand.
Shares of Virgin Galactic are up about 65% this year as of Tuesday’s close of $5.74 per share.

WATCH LIVEWATCH IN THE APP More

As the United Auto Workers prepares for contentious negotiations with Detroit automakers later this year, the union’s leadership is undergoing its largest upheaval in decades.
The shuffle follow a yearslong federal investigation that uncovered systemic corruption involving bribery, embezzlement and other crimes of top UAW leaders.
Runoff elections for three leaders, including the labor organization’s president, are taking place through Tuesday, followed by vote tabulations beginning Wednesday.

United Auto Workers members on strike picket outside General Motors’ Detroit-Hamtramck Assembly plant on Sept. 25, 2019 in Detroit.
Michael Wayland / CNBC

DETROIT – As the United Auto Workers prepares for what are expected to be highly contentious negotiations with the Detroit automakers later this year, the union’s leadership is undergoing its largest upheaval in decades.
The shuffle follows a yearslong federal investigation that uncovered systemic corruption involving bribery, embezzlement and other crimes among the top ranks of the organized labor group.

Thirteen UAW officials were convicted as part of the investigation, including two past presidents. As part of a settlement with the union in late 2020, a federal monitor was appointed to oversee the union and a direct election process was voted upon that is reshaping its International Executive Board.
A reform group called UAW Members United has successfully campaigned to elect five new representatives to the 14-member board, but not all seats are settled. Runoff elections are taking place through Tuesday for three other positions, including the highest-ranking post of president.
The results mean a divided board will lead negotiations, starting this summer, with General Motors, Ford Motor and Stellantis. The vote count for the runoff elections will begin Wednesday, overseen by an election vendor and the federal monitor as well as other officials.
“The newly elected members were elected on trying to make change,” said Art Wheaton, a labor expert with the Worker Institute at Cornell University. “They were not elected to get along and play nice together. They were elected primarily because they were going to shake things up.”
Wheaton said new faces in the bargaining room create a “different dynamic” and could hurt stability of the process, but doesn’t change the underlying concerns.

“It certainly creates additional stress or additional problems, but I think the problems are going to be there, no matter who’s at the table.”
For investors, UAW negotiations are typically a short-term headwind every four years that result in higher costs. But this year’s negotiations are expected to be among the most contentious and important in recent memory, against the backdrop of a yearslong organized labor movement across the country, a pro-union president and an industry in transition to all-electric vehicles.
Don’t forget ongoing economic pressures such as inflation and recessionary fears in the years, if not months, ahead. Canadian union Unifor will also be simultaneously negotiating this year with the Detroit automakers, adding even more complexity and competition for investments and jobs.
“There’s a ton of moving parts. It’s getting to be one of the most consequential negotiations since the bankruptcies in 2009,” said Kristin Dziczek, a Detroit-based automotive policy advisor for the Federal Reserve Bank of Chicago.

Wall Street watching

For Wall Street, the fear of complicated and drawn-out negotiations is already spurring cost concerns.
“While the market tends to look through the one-time impact of potential work stoppages, it may not look through the potential for double-digit increases in labor costs that could characterize this year’s negotiations,” Morgan Stanley analyst Adam Jonas said in a note last month.

Speaking in front of a backdrop of American-made vehicles and a United Auto Workers (UAW) sign, Democratic U.S. presidential nominee and former Vice President Joe Biden speaks about new proposals to protect U.S. jobs during a campaign stop in Warren, Michigan, U.S., September 9, 2020.
Leah Millis | Reuters

The union is expected to push for better benefits and wages to offset inflation and reward its members for working through much of the coronavirus pandemic, assisting the companies in reporting record profits.
The automakers are expected to push back on adding fixed costs to their operations and continue to support more flexible benefits such as profit-sharing that give rank-and-file members larger bonuses when the company is doing well. They’ll also be attempting to please the union without causing a prolonged strike.
During the last round of bargaining in 2019, negotiations between the Detroit automakers and UAW included a national 40-day strike against General Motors. The automaker said the strike cost it about $3.8 billion to $4 billion for 2019.

Presidential election

For the 2022 elections and ongoing runoff, the UAW shifted to a direct election format — in which each member and retiree of the union was allowed to vote for officers — doing away with a weighted delegate system that saw one caucus maintain a stranglehold on the union’s elections and leaders for more than 70 years.
The presidential ballot has come down to a runoff between incumbent Ray Curry and Shawn Fain, a UAW Members United candidate and local leader for a Stellantis parts plant in Indiana.
Curry during the election process has tried to distance himself from the former corrupt UAW leaders.
In the general election, Curry received about 600 more votes than Fain. Only 11% of issued ballots, or 106,790, were cast. However, dissident votes were spread across five candidates, some of which have put their weight behind Fain.
Nearly 140,000 ballots had been received through Friday for the runoff elections, according to the federal monitor.

U.S. President Joe Biden walks with Ford Motor Company Executive Chair William Clay Ford Jr. and Ray Curry, President of the United Autoworkers, during a visit to the Detroit Auto Show, to highlight electric vehicle manufacturing in America, in Detroit, Michigan, September 14, 2022.
Kevin Lamarque | Reuters

“I just believe the overall top piece is experience,” Curry told CNBC. “Experience is going to be important not just for our bargains taking place this year, but for legislators’ side for membership in total.”
Both candidates have said they will seek benefit gains for members, advocating for the return of a cost-of-living adjustment, or COLA, as well as raises.
“If we’re in inflationary times, it adjusts and makes sure [workers] have some type of benefit that moves their base wage in conjunction with what’s happening in the economy. It can be a good piece for us,” Curry said earlier this month regarding COLA.

Shawn Fain, candidate for UAW president, is in a run-off election with incumbent Ray Curry for the union’s highest-ranking position.
Jim West for UAW Members United

UAW Members United ran on the platform of “No corruption. No concessions. No tiers.” The last being a reference to a tiered pay system implemented by the automakers during recent negotiations that members have asked to be removed.
“UAW members have had enough with concessions and company-friendly leadership. We are coming for our fair share whether the Detroit automakers like it or not,” Fain said in an email Tuesday to CNBC. “Our number one task is to recover the concessions that we’ve given up to our employers such as tiered pay and benefits, as well as job security. To win we are going to need to rebuild trust and get every member of this union involved.”

WATCH LIVEWATCH IN THE APP More

Disney and Marvel Studio’s “Ant-Man and the Wasp: Quantumania” saw the sharpest decline in ticket sales from opening weekend to second weekend in Marvel Cinematic Universe history.
The film also has more counter-programming than other Marvel films released in the last few years, including “Cocaine Bear” and “Jesus Revolution.”

Marvel Studios’ “Ant-Man and the Wasp: Quantumania.”

Not every Marvel movie can be “Avengers: Endgame.”
That’s the sentiment from box office analysts after the Marvel Cinematic Universe’s latest film “Ant-Man and the Wasp: Quantumania” saw the sharpest decline in ticket sales from opening weekend to second weekend in franchise history.

After securing $106.1 million during its first Friday, Saturday, Sunday in domestic theaters, the Disney film tallied just $31.9 million over the weekend, a 69.8% decline.
“This is a decline somewhat sharper than expected, but we also shouldn’t make a mountain from a mole hill,” said Shawn Robbins, chief analyst at BoxOffice.com. “Marvel films have been trending more and more frontloaded for years now, and that’s perhaps compounded slightly by the reality that theaters are now charging more for opening weekend tickets than subsequent days and weeks.”
To be sure, “Quantumania” is one of the worst reviewed Marvel films, with a 48% “rotten” critics’ score on Rotten Tomatoes. However, fans appeared to have enjoyed the film, generating an 83% audience rating.
Still, blockbuster features often see a significant decline from the first weekend to the second, as pent up demand drives moviegoers to see films as soon as they open. Marvel’s other 30 films range from a 44% drop for 2018’s “Black Panther” to a 67.8% drop for the pandemic released “Black Widow.”
“Thor: Love and Thunder,” “Doctor Strange in the Multiverse of Madness” and “Spider-Man: No Way Home,” a co-production with Sony, all saw second week drops in excess of 67%.

“Love and Thunder” went on to collect $760 million globally, “Multiverse of Madness” snared $952 million during its worldwide run and “No Way Home” nearly reached $2 billion in ticket sales.
“In the grand scheme of things, Marvel is still on some of the surest footing of any franchise in history,” Robbins said.
The film also has more counter-programming than other Marvel films released in the last few years. During the pandemic, films could run for weeks without any direct competition or other theatrical releases. Now, studios are offering up a steadier stream of content and audiences have more choices.
Over the weekend, Universal’s “Cocaine Bear” sniffed up $23 million. The R-rated horror-comedy saw 63% of its ticket sales from the 18- to 34-year-old demographic, the same group that often comes out for big budget superhero flicks.
“Universal may not have had success with Dark Universe, but their Snark Universe is alive and well,” said Jeff Bock, senior analyst at Exhibitor Relations.
He pointed to “Violent Night” and “M3gan,” in addition to “Cocaine Bear,” as films that have outperformed expectations at the box office. This showcases that audiences are interested in a diversity of genres and are coming out to cinemas to see them.
“‘Cocaine Bear’ jumped into the public consciousness seemingly overnight and rode a wave of interest, and incredulity, to overperform this weekend with its grindhouse sensibilities,” said Paul Dergarabedian, senior media analyst at Comscore. “[It attracted] an enthusiastic audience hungry for something out of the ordinary.”
Additionally, Lionsgate’s “Jesus Revolution” catered to faith-based audiences and drummed up $15.5 million over the weekend.
“Clearly there is a demand for movies of all types and this weekend showed how a diverse selection of films can drive traffic to the movie theater,” Dergarabedian said.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Cocaine Bear,” “Violent Night” and “M3gan.” NBCUniversal also owns Rotten Tomatoes.

WATCH LIVEWATCH IN THE APP More

A program in Philadelphia is offering Black developers a fresh opportunity to build homes and broaden their businesses.
Philly Rise is designed to recruit, train, support and open up access to capital.
Black Americans represent less than 5% of residential real estate developers.

Black Americans represent less than 5% of residential real estate developers, largely because they can’t get equal access to capital, according to a recent report by the Urban Land Institute.
Institutional capital – real estate investment trusts and private equity in particular – are the dominant players. Black developers often don’t have exposure to those investors.

But a new program in Philadelphia is offering developers of color a unique opportunity to build both new homes and their businesses. Philly Rise is designed to recruit, train, support and open up access to capital. The goal: Produce 50 new residential housing units annually for the next five years.
“There is an imbalance, and what we’re trying to do is correct that imbalance by taking away all the barriers, so there’s no reason for anybody to say no,” said Thomas Webster, Philly Rise program director.
Christopher Pitt understands the value of a home more than most.
“I grew up in a two-bedroom shack, 10 people showing up. No gas, limited electric and an outhouse, right?” said Pitt, co-founder of PittPass Development Group.
That’s why he’s been working in real estate for 20 years, developing affordable housing first in Delaware and Maryland, and soon in Philadelphia.

“How do we flip communities from being high rental to homeownership? Because that’s where generational wealth happens, that’s where communities happen,” said Pitt.
But even with his lengthy experience in the business, Pitt still has trouble getting capital for his company’s projects.
“It is extremely hard,” Pitt said, noting that people like to do business with people with whom they share similarities. “But I just don’t think there’s enough minority leadership in those positions.”
After years of self-funding and borrowing hard money at sky-high interest rates, Pitt turned to Philly Rise, which Webster and his community investment partners call a “real estate accelerator.”
“Our goal with our participants is not to teach them how to rehab or build brand new houses, but how to build successful real estate businesses,” said Webster.
In a series of classes for Philly Rise, industry professionals teach the students, who must already be professional developers, how better to access capital and how to work the system to win city projects.

Gaining credibility

It’s aimed at helping developers gaining bankability and credibility, Pitt said: “This goes to taking you from bootstrapping to certified financial documents, meaning that I am saying, ‘It’s OK, bank, I have my paperwork in place, I know my numbers.’ So now again reducing the risk, right? Credibility.”
Each program participant must not only be an experienced developer, but also have 5% of their own capital to commit to the program. Philly Rise invests 10%, and the rest comes from CDFIs – community development lenders certified by the U.S. Treasury.
Khalief Evans, co-founder of Seamless Pros, started rehabbing old homes in 2016. So far his company has done roughly 100 renovations. Like Pitt, he focuses on affordable housing.
“One of the biggest challenges that we face being a small development company in Philadelphia is it’s incredibly difficult to get the funding we need in order to get the project done, as well as scale,” said Evans. “It may be the culture, it may be the level of knowledge that we have regarding financing.”
He said he applied for the Philly Rise program in order to grow his business.
“The lack of knowledge to attain finances does create a huge barrier and the resources, being able to speak with and get guided and mentored by industry professionals that look like you that can emphasize with you, that can reflect on some of the things that you’ve been through and even some of the challenges, it would help,” he said.
Philly Rise is also partnering with the Urban Land Institute, which is the nation’s largest real estate development organization. The institute has an online university it’s providing to the program at a steep discount.
Philadelphia currently estimates it needs about 35,000 new housing units over the next five years, according to Webster. He sees that as a huge opportunity for the cohorts at Philly Rise.
“The model we’re building here really becomes something that can be replicated in any market and become a solution to neighborhood regeneration instead of outside community gentrification,” he said.
–CNBC’s Lisa Rizzolo contributed to this article.

WATCH LIVEWATCH IN THE APP More

Elon Musk’s SpaceX launched the first batch of its next-generation Starlink internet satellites.
A Falcon 9 rocket carried 21 of the satellites, known as “V2 Mini” satellites, into orbit.
The company said the V2 Mini satellites add about four times as much network capacity per satellite compared with prior iterations.

A Falcon 9 rocket launches a Starlink mission from Florida on Feb. 27, 2023.

Elon Musk’s SpaceX has launched the first batch of its next-generation Starlink internet satellites as the company upgrades and further builds out its orbiting network.
A Falcon 9 rocket carried 21 of the satellites, known as “V2 Mini” satellites, into orbit on Monday. The satellites represent the first iteration of Starlink’s “Gen2” plans, which the Federal Communications Commission authorized in December.

Musk shared a video of the V2 Mini satellites releasing from the rocket into orbit. While launches of the company’s first-generation models carried about 50 to 60 satellites at a time, the new spacecraft are larger and heavier than before, meaning each Falcon 9 launch carries fewer satellites. The company plans to eventually use its Starship rocket, which is in development, for future second-generation Starlink missions.

The upper stage of a Falcon 9 rocket deploys a stack of Starlink “V2 Mini” satellites in orbit on Feb. 27, 2028.

Before the launch, SpaceX highlighted the improved capabilities of the V2 Minis, such as “more powerful phased array antennas” and “new argon Hall thrusters” for maneuvering in orbit. The company said the V2 Mini satellites add about four times as much network capacity per satellite compared with prior iterations.
Notably, Monday also represented the 100th consecutive occasion that SpaceX has successfully attempted and landed a Falcon 9 rocket booster after a launch — a streak dating back to Feb. 16, 2021. The company is conducting orbital rocket launches at an unprecedented rate, with a mission about every four days on average in 2023.

Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

The company has launched about 4,000 Starlink satellites to date, with its network reaching 1 million subscribers in December across a variety of product offerings — with services for residential, business, RV, maritime and aviation customers.
Last week, SpaceX adjusted the pricing of its residential Starlink service based on capacity demands.

WATCH LIVEWATCH IN THE APP More

Higher mortgage rates weighed on home price gains in December.
Home prices in December were 5.8% higher than the previous December, according to S&P Case-Shiller. That’s down from a 7.6% annual gain in November.
Prices are now 4.4% below their June peak.

A “For Sale” sign in front of a home in Roseville, California, on Dec. 6, 2022.
David Paul Morris | Bloomberg | Getty Images

Higher mortgage rates weighed on home price gains at the end of 2022. While prices were still higher than they were a year earlier, the rate of increase slowed quickly, according to data released Tuesday.
Home prices in December were 5.8% higher than the previous December, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. That is down from a 7.6% annual gain in November. Prices are now 4.4% below their June peak.

For all of 2022, the 5.8% price gain was the 15th best performance in the index’s 35-year history, but was well below 2021’s record-setting 18.9% gain.
The annual increase for the 10-city composite, which includes the New York and Los Angeles metro areas, was 4.4% in December, down from 6.3% in the previous month. The 20-city composite, which includes the Seattle and Dallas areas, marked a 4.6% year-over-year gain, down from 6.8% in the previous month.
Cities still seeing the biggest price gains were Miami, Tampa, Florida, and Atlanta – up 15.9%, 13.9% and 10.4%, respectively. All 20 cities reported lower prices in the year ended December 2022 versus the year ended November 2022.
“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers,” said Craig J. Lazzara, managing director at S&P DJI. “Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
Mortgage rates began rising in the spring of last year, with the average rate on the 30-year fixed loan more than doubling to well over 7% by the end of October. Rates then pulled back slightly in December and January, but are now edging closer to 7% again.

Home sales reacted in January, with a sharp jump in properties going under contract, but that is unlikely to have continued in February with rates higher again and still very little on the market for sale.
“There is still a lot of uncertainty in the market. Weekly data on buyer activity indicates that homebuyers may be watching mortgage rates closely. Sellers will need to price their homes appropriately to attract buyers and, as a result, we likely will see a continued decline in home price growth through the first quarter of the year,” said Lisa Sturtevant, chief economist at Bright MLS.

WATCH LIVEWATCH IN THE APP More

Target topped Wall Street’s earnings expectations for the first time in a year.
Its holiday-quarter sales rose roughly 1% from the same period a year prior.
CEO Brian Cornell in a release cited “a very challenging environment,” with groceries, beauty items and household essentials lifting sales as consumers focused on necessities.

A shopper leaves a Target store in New York, August 15, 2021.
Scott Mlyn | CNBC

Target on Tuesday topped Wall Street’s earnings expectations for the first time in a year, as its holiday-quarter sales rose roughly 1% from the same period a year prior.
Still, the big-box retailer revealed shrinking profit and margins and gave a conservative full-year outlook, saying customers are tossing fewer discretionary items into their shopping carts.

The company said it expects that comparable sales, a key metric that tracks sales at stores open at least 13 months and online, will range from a low single-digit decline to a low single-digit increase for fiscal 2023. Target said it expects full-year earnings per share of between $7.75 and $8.75. That was below Wall Street’s expectations of $9.23 per share, according to StreetAccount estimates.
CEO Brian Cornell said in a release the company performed well, despite “a very challenging environment,” with groceries, beauty items and household essentials lifting sales as consumers focused on necessities.
“I think we’re being appropriate with our guidance in this environment,” Cornell said Tuesday morning on CNBC’s “Squawk Box.” “We know inflation is still high — it’s been very stubborn. It’s still at a very high level. We know interest rates are rising. And we’re going to watch the consumer really carefully.”
Cornell will share more of Target’s plans for the year at an investor day in New York City later Tuesday morning.
Shares of Target were down slightly in premarket trading Tuesday.

Here’s what the company reported for its fiscal fourth quarter that ended Jan. 28, compared with Refinitiv consensus estimates:

Earnings per share: $1.89 vs. $1.40 expected
Revenue: $31.4 billion vs. $30.72 billion expected

Though the company beat on the top and bottom lines, it cleared a bar that had been substantially lowered in recent months. 
The big-box retailer, known for its lower-priced, but fashion-forward clothing, home goods and more, saw sales spike during the first two years of the Covid pandemic. Its annual total revenue has grown by about $31 billion – or nearly 40% – from fiscal 2019 to 2022.
Yet over the past year, Target has faced a shift in both sales trends and market sentiment. The discounter became a poster child in the industry for inventory troubles, squeezed profit margins and concerns about inflation-pinched, middle-income consumers. The company missed Wall Street’s earnings expectations for the first three quarters of the fiscal year and warned investors to expect softer holiday sales. 
Target’s net income for the period, which runs from November through January, fell by about 43% to $876 million, or $1.89 per share, from $1.54 billion, or $3.21 per share in the year-ago period.
Comparable sales, also called same-store sales, rose 0.7% in the quarter. That surpassed Wall Street’s expectations for a decline of 1.6%, according to StreetAccount estimates.
Customer traffic, which includes online and in stores, grew by 0.7% in the fourth quarter, though Target’s average ticket was roughly flat.
Target said needs-based merchandise sold better in the quarter. Food and beverage made up its strongest category, with comparable sales rising by low double digits year over year. Essentials and beauty increased by high single digits, and several discretionary-focused categories, including home and apparel, declined, but the company didn’t specify by how much. 

The company’s private-label brands, which are often cheaper than national brands, grew at a faster pace than overall sales. 
One of Target’s weakest points has been its profit margins, which have been weighed down by markdowns and higher supply chain costs. Last summer, Target announced an aggressive inventory plan to clear through unwanted goods.
Its inventory levels are in better shape than previous quarters, dropping by 3% year over year during the fiscal fourth quarter. Its inventory had been up about 14% year over year in the third quarter, 36% in the second quarter and 43% in the first quarter. 
Target said that it has a different mix of merchandise, too. Inventory in discretionary categories fell about 13% compared with a year ago, as the retailer ordered more high-frequency items like food and paper towels.
“We realized consumer spending habits have changed,” Cornell said on “Squawk Box.” “So we took a pretty bold action and said, ‘We’re going to address inventory. We’re going to get our inventory levels right.’ We finished the year exactly where we wanted to be.”
The company has missed its goal of reaching healthier margins, though. It had promised an operating income margin rate around 6% in the back half of the fiscal year, when it cut its profit outlook in June for the second time. For the fourth quarter, Target’s operating margin was 3.7%, weaker than the 3.9% it posted for the third quarter but ahead of the 3.1% Wall Street was looking for, according to StreetAccount estimates. 
“We’re on a multiyear journey to get back to pre-pandemic margin levels,” Cornell said. “Right now, mix is certainly impacting margins. We’re selling more lower-margin items like food and beverage and household essentials, and less of apparel and home, but that’s going to moderate over time.”
Target now says it plans to return to its pre-pandemic rate of 6% beginning next fiscal year or later, depending on the economic backdrop and consumer demand. 
Target’s stock has fallen nearly 40% from its all-time closing high. It closed Monday at $166.81 per share, bringing its market value to nearly $77 billion. So far this year, however, its shares have been up about 12% and outpaced the almost 4% growth of the S&P 500.

WATCH LIVEWATCH IN THE APP More