Salaried employees at Target (NYSE:TGT) will have a little more money to spend this year after the company said excess profits will be used to double employee bonuses.
Thanks to lower markdowns and lower transportation costs, the company earned a profit of $2.98 per share in Q4, up 57.6% from the same quarter last year, while revenue was up 1.7%.
The bonuses only apply to salaried, non-senior executive employees and will be paid at the end of March, according to Bloomberg.
“The bonus structure is informed by goals set at the beginning of the fiscal year and includes sales performance and profit outcomes,” a Target spokesperson told Bloomberg.
Besides the $2B in excess operating profit, the company is betting on its new subscription tier to bring in additional income. In its Q4 earnings call, Target (TGT) management said Target Circle 360 will provide unlimited free same-day delivery for orders over $35 in an effort to compete with Amazon’s (AMZN) Prime and Walmart (WMT). Same-day services such as in-store pickup, Drive Up and Shipt represents more than 10% of total sales and were up by 13.6% in Q4.
