Target rings up strong holiday sales growth of 5.7%

TNS

Jan. 11, 2019

Target has remodeled toy sections in more than 100 stores, including 22 in Minnesota, to capture toy sales following the closure of Toys ‘R’ Us.
Associated Press

MINNEAPOLIS  — Holiday sales jumped 5.7 percent at Target Corp. during the November-December holiday shopping season compared to a year ago, fueling what could be the retailer’s largest full-year sales gains since 2005.

The boost came as more people hit stores and shopped online, the retailer said Thursday, noting that the average amount shoppers spent increased only slightly.

The company’s shares fell nearly 4 percent on premarket trading, however.

Target is expected to report its fourth quarter and year-end results in early March. The company maintained its earlier guidance of fourth-quarter comparable sales growth of 5 percent and full-year adjusted earnings per share between $5.30 and $5.50.

“This performance demonstrates the benefit of placing our stores at the center of every way we serve our guests, including both in-store shopping and digital fulfillment,” Target Corp. chief executive Brian Cornell said in a statement.

For Target, it’s the second year of strong gains during the crucial period. In 2017, Target’s November- December sales were up 3.4 percent, giving it a healthy two-year upswing of 9 percent.

All major categories had sales increases, but the company highlighted gains in toys, baby products and low-priced seasonal gifts sold at its kiosks and end-caps.

But the “star of the show” was a 29 percent spike in digital sales from mobile shopping and its website, said Neil Saunders of GlobalData Retail in a morning note.

Minneapolis-based Target is on the final stretch of a three-year $7 billion structural overhaul that includes updating its technology, reformatting stores and changing how it ships and delivers packages.

For the holidays, Target promised free, two-day shipping with no minimum orders and doubled the number of seasonal hires to tackle digital sales in both stores and distribution centers.

Shoppers saved the company shipping costs by picking up merchandise themselves on about a quarter of those sales.

Target said its in-store pickup and drive-up services grew about 60 percent compared to last year.