During its annual investor meeting in New York City earlier this week, Target officials discussed the company’s plan to open 30 new stores ranging from midsize locations in dense suburban areas to small stores in cities like Charleston, South Carolina. The company’s typical store size had been 144,000 square feet, but over the past few years Target has designed new stores as small as 15,000 square feet.

The former Kmart location in West Ellicott is a 113,146 square foot building and is expected to open as a Target sometime this fall.

“What we are saying — this middle ground that we haven’t really built in the past, and Brian and I have walked in those. We built some 60,000, 70,000, 80,000, even 90,000 square foot stores, a lot of old Kmarts. Love them,” said John Mulligan, Target executive vice president and chief operating officer. “They are big enough that you get the entire Target experience, but the backroom is big enough so that we can do all of our digital fulfillment as well. So we get this great middle ground between the two and I think our message today is we can do all of that. Over the past few years, between our properties team, store design, construction, Christina’s merchant team, because assorting these stores is critical getting the right assortment for the neighborhood to serve that community is incredibly important, we can do all of that.”

Fourth-quarter profits increased nearly 12%, while sales increased 9.4%. Gross margins fell from 26.8% during the fourth quarter of 2020 to 25.7% in the most recent quarter. For 2022, Target officials said they expect low- to mid-single digit revenue growth, an operating margin rate of 8% or higher, low-single digit growth in operating margin dollars, and high-single digit growth in Adjusted Earnings per Share.

In this March 5, 2019, file photo Brian Cornell, Chairman of the Board and CEO of Target, speaks at a financial community meeting in New York. Target is raising the minimum hourly wage for its workers for the third time in less than two years. The discounter said Thursday, April 4, 2019, that it plans to raise the hourly starting wage to $13 from $12 in June. AP photo

Supply chain issues and the war in Ukraine are among the issues factoring into low early-year growth, according to Brian Cornell, Target chairman and chief executive officer. But the company is working to address those issues by adding sorting centers in Dallas, Houston, Austin, Texas, Atlanta and Philadelphia by spring with another to open later in the year. The company also uses its new stores to help fulfill online orders, which is now 19% of Target’s overall sales. The West Ellicott store will fit that mold.

“At the same time, small isn’t always got planned,” Mulligan said. “But our store is now more productive than ever, there are benefits to a bigger box and given the favorable real estate market, these sites are available at attractive deals. I am not talking about our largest store formats, though they continue to do extremely well for us. I am talking about midsized stores, two times to three times bigger than our small formats. These sites are built in dense neighborhoods, with enough room for a traditional store experience and digital fulfillment, helping us bring Target closer to even more guests.”

According to an Associated Press report, net income for the quarter that ended Jan. 29 reached $1.54 billion, or $3.21 per share. Adjusted earnings per share for the latest quarter was $3.19, easily topping the $2.85 that industry analysts were looking for, according to FactSet. It also topped last year’s fourth-quarter profit of $1.38 billion, or $2.73 per share. Revenue was $31 billion compared with Wall Street projections of $31.32 billion. The company registered an 8.9% increase in sales at stores opened at least a year.

At the same time, Target is planning an aggressive increase in starting wages from $15 to $24 an hour at an expected cost of about $300 million across the company as well as expanded access to health insurance for more Target employees and their families.

“Even as the U.S. labor market is seeing some of the highest turnover on record, our rate in Target stores remains below pre-pandemic levels,” said Mark Schindele, Target executive vice president and CSO. “Our stores are fully staffed and we have been able to leverage the training and the tenure of our team to easily shift against demand without missing a beat.