Target Posts Strong Holiday Sales Gains
January 09 2018 - 8:19AM
Dow Jones News
By Khadeeja Safdar and Imani Moise
Target Corp. said holiday sales were strong both in its stores
and online, as the retailer was boosted by healthy U.S. consumer
spending as well as its own turnaround efforts.
Sales at stores open at least a year rose 3.4% during November
and December, compared with a 1.3% decline in the same period last
year when the chain struggled to attract shoppers to its stores and
compete with Amazon.com Inc.
Target's improvement follows a string of announcements from
major chains, including Macy's Inc., J.C. Penney Co. and Kohl's
Corp., all of which reported sales growth in the critical holiday
months.
The positive results extended to Costco Wholesale Corp., which
said sales growth continued at a strong pace in December.
Economists have predicted that low unemployment and rising wages
gave consumers the confidence to spend this holiday season.
Retailers had their best holiday sales since 2011, according to
Mastercard SpendingPulse, which tracks payments in stores and
online.
Chief Executive Brian Cornell said physical stores played an
important part of fulfilling digital orders during the holiday
season.
He highlighted toys like L.O.L. Surprise dolls and Barbie
Dreamhouse as hot items during the season and said electronic sales
continued to be driven by the Nintendo Switch and Apple
products.
Shares of the retailer jumped 4.2% to $70 during premarket
trading. Before Tuesday's announcement, the stock had been down 6%
over the past 12 months.
Like other big-box chains, Target has been struggling to compete
with Amazon, which is benefiting from the movement of consumer
shopping online. After a weak holiday performance last year, the
Minneapolis-based company embarked on a multibillion-dollar
spending plan to improve its stores and digital capabilities.
Mr. Cornell has since invested in Target's supply chain,
launched new brands, remodeled physical locations and lowered
prices. The company recently agreed to acquire grocery-delivery
startup Shipt Inc., moving to match services that have been rolled
out by rivals Amazon and Wal-Mart Stores Inc.
Mr. Cornell also said in 2018 the company plans to open about 30
small-format stores and triple the size of its remodel program to
more than 325 stores.
In the months leading up to the holiday period, Target took
several steps to revamp its promotional strategy, cutting prices on
thousands of items and streamlining the number of discounts it
offers. For example, the company promoted weekend deals throughout
the season in hopes of encouraging customers to visit stores on
days they are more likely to make a trip.
Overall, the company said comparable-store sales, which includes
its web business, are expected to rise 3.4% in the fiscal fourth
quarter. In November, Target had projected quarterly comparable
sales in the quarter would be flat to 2% higher than a year
ago.
The company also raised its profit target for the fourth
quarter, which it expects to report later in February. Target now
expects adjusted earnings of $1.30 to $1.40 a share, compared with
prior guidance of $1.05 to $1.25 a share.
Write to Khadeeja Safdar at khadeeja.safdar@wsj.com and Imani
Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
January 09, 2018 08:04 ET (13:04 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
J C Penney (NYSE:JCP)
Historical Stock Chart
From Aug 2024 to Sep 2024
J C Penney (NYSE:JCP)
Historical Stock Chart
From Sep 2023 to Sep 2024