Target is on a roll.
The big-box retailer revealed holiday sales Wednesday morning, with total comparable sales growing 17.2 percent, year-over-year, for the November-December period, driven by skyrocketing growth in online sales as well as Target’s leveraging of its physical store base to fulfill digital orders.
“The momentum in our business continued in the holiday season with notable market share gains across our entire product portfolio,” Brian Cornell, chairman and chief executive officer of Target Corp., said in a statement. “We’re very pleased with our results and the strength of our performance is a reflection of the tireless work of our team to support our guests through a safe, convenient and inspirational experience. Throughout the holidays, we delivered joy for holiday shoppers while focusing on safety — adjusting promotions to reduce crowding while delivering easy, contactless fulfillment options through drive-up and Shipt.”
Bright spots included the company’s digital comparable sales, up 102 percent year-over-year, which Target said was largely driven by its same-day fulfillment services: order online, pick up in store; drive up, and Shipt. In fact, drive-up services surged more than 500 percent during the holiday period, year-over-year, while Shipt grew more than 300 percent.
Moreover, between store-originated sales, same-day services and Target’s ship-from-store capabilities, about 95 percent of the company’s sales during the period were fulfilled in stores. Traffic also grew during the period, up 4.3 percent, year-over-year.
By category, home had the strongest gains, a comparable sales growth increase in the low-20 percentage range; followed by hardlines, also in the low-20 percentage range; then electronics, in the mid-20s range; beauty and essentials grew in the low teens, and apparel was up high-single digits. Meanwhile, the average ticket order increased 12.3 percent during the holidays.
Shares of Target, which were down about 0.50 percent during Wednesday’s trading session, are up more than 60 percent year-over-year.
“Target’s holiday 2020 sales results, encompassing November and December, continue to position it as one of the true pacesetters in U.S. retail and reinforce the importance of physical stores in a multichannel model, especially in light of the challenged delivery environment,” said Charlie O’Shea, Moody’s vice president. “While the retail dynamic created by the pandemic muddies the relevance of year-over-year comparisons, Target’s numbers by any yardstick obliterate the bull’s-eye as it continues to expand market share.”
Seth Sigman, an analyst at Credit Suisse, pointed out, however, that the company did not comment on gross margins, which “we believe it could point to flat [gross margins] to up slightly.”
No guidance was given on the remainder of the quarter or January sales to date, although Cornell said, “We’ve seen continued strong sales trends in the new year and as we turn to our 2021 plans, our team is focused on continuing to build on the guest engagement and significant market share we gained throughout 2020.”
Meanwhile, Target has halted political contributions in response to the recent violence on Capitol Hill.
“The TargetCitizens PAC is funded through voluntary contributions from our team members and contributes in a bipartisan manner to a range of federal candidates and organizations,” the company said in a statement. “We know that there isn’t a single candidate who aligns completely with Target or our team members on every issue, which is why we rely on established criteria like a candidate’s impact on our business, committee assignments and more when we make contributions. Target is fully transparent about our PAC contributions and provides regular updates on our corporate website. Given the political volatility of the past year, including last week’s events, we are temporarily pausing all political donations.”
The news follows both Facebook and Twitter permanently removing President Donald Trump from their platforms.
January 14, 2021 at 12:24AM
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Target Reveals Holiday Sales Grew More Than 17 Percent - WWD
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