Target (TGT) Posts Sturdy Holiday Sales, Comps Tick Up 17.2%
Amid a challenging retail backdrop, Target Corporation TGT posted sturdy holiday sales, courtesy of a reinvented approach to the busiest time of the year. This Minneapolis, MN-based company offered more deals this festive season and extended Price Match Guarantee. Thanks to its one-stop shopping destination, customers purchased everything they needed, be it holiday gifts and toys, food, apparel, décor or essentials. Notably, the company took every step to provide customers a safe and convenient shopping experience amid the pandemic.
Brian Cornell, chairman and CEO, said, "The momentum in our business continued in the holiday season with notable market share gains across our entire product portfolio.”
A Closer Look at the Holiday Sales
Target informed that comparable sales in the combined November/December period increased 17.2%, backed by 12.3% jump in average ticket as consumers consolidated trips. Comparable traffic grew 4.3%. While store-originated comparable sales rose 4.2%, comparable digital sales soared 102% driven primarily by the company's same-day fulfillment services.
Markedly, this general merchandise retailer continued to gain market share in all five of its core merchandising categories owing to robust demand. The company registered strongest growth in the Home category.
We note that Home registered comparable-sales growth in the low-20% range during the November/December period. Comparable sales in Hardlines also surged in the low 20% range, reflecting mid-20% gain in Electronics. In Food & Beverage, comparable sales growth was in line with the company average, while Beauty & Essentials registered increase in the low teens. Apparel posted comparable sales growth in the high-single digit range.
Impressively, stores fulfilled more than 95% of the company’s sales in the November/December period. Same-day fulfillment services (Order Pick Up, Drive Up and Shipt) skyrocketed 193%. While sales fulfilled by Shipt grew more than 300% year over year, sales through Drive-Up were up more than 500%.
Wrapping Up
Target has been deploying resources to enhance omni-channel capabilities, come up with new brands, refurbish stores and expand same-day delivery options to provide seamless shopping experience. Markedly, the company has been making multiple changes to its business model to adapt and stay relevant in the ever-evolving retail landscape. Target’s impressive holiday sales performance is a testament to the same. Management highlighted that it has seen continued solid sales trends in the new year.
Shares of this Zacks Rank #2 (Buy) stock has appreciated 63.3% in the past six months and outperformed the industry’s rally of 29.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 More Retailers’ Holiday Sales Reports
We note that L Brands LB posted strong holiday sales results that exceeded management’s initial expectations. Strength in the Bath & Body Works segment and improved Victoria’s Secret performance aided the upbeat outcome. Comparable sales for the nine-week period ended Jan 2, 2021, increased 5%.
GameStop GME informed that its comparable store sales for the nine-week period ended Jan 2, 2021 increased 4.8%. Notably, e-commerce sales soared 309%, and represented about 34% of total company sales. Again, Zumiez ZUMZ reported comparable sales increase of 1.7% for the 10-week period ended Jan 9, 2021. Meanwhile, total sales dipped 0.7% during the holiday period.
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