Target gains steam heading into crucial holiday season
In this July 10, 2019, file photo shoppers visit the downtown Target Store in Minneapolis. Target Corp. reports financial results Wednesday, Aug. 21.[AP/ Jim Mone,]
Target is the latest big U.S. retailer to show that it’s prospering during the pandemic.
The Minneapolis-based company reported Wednesday that its online sales surged 155% in the three months that ended Oct. 31. Sales at its stores opened for a least a year rose 10%. Customer traffic rose 4.5% and average dollars spent rose nearly 16%.
It joined Walmart and Home Depot in reporting strong sales for the retailers’ fiscal third quarter as shoppers consolidate their trips and focus on home-related activities.
The strong sales bodes well for the holiday shopping season, while offering the latest evidence of a widening gap between the discounters and big box stores and mall-based retailers. Department store Kohl’s reported on Tuesday that its quarterly sales dropped 13%.
Shares rose almost 3% before the opening bell Wednesday.
Target said it earned $1.01 billion, or $2.01 per share, for the quarter. That compares with $714 million, or $1.39 per share in the year-ago period. Adjusted earnings per share was $2.79.
Analysts expected $1.60 per share on $20.79 billion in sales, according by FactSet.
Its total sales rose 21.3% to $22.34 billion.
Target also says that it has has gained more than $6 billion more in market share so far this year. Consumer electronics enjoyed more than a 50% sales gain in the quarter, while Target’s home-goods business increased in the mid-20% range. Clothing posted sales of nearly 10%, while beauty, food and beverages increased in the high-teen percentage range.
Target has been expanding its online services. During the latest quarter, drive-up sales increased more than fivefold, while order pickup continues to increase with more than a 50% increase. And Target’s same-day service with Shipt increased nearly threefold during the quarter.
Last week, Target announced a deal with nation’s largest beauty store chain, Ulta Beauty, that will place Ulta shops in more than 100 Target stores by mid-2021. The shops, which will each be about 1,000 square feet and carry makeup, skincare, and fragrance, will operate beside existing beauty sections in Target stores.
Ulta Beauty partners with Target for ‘shop-in-shop’ concept in 100 stores