Target Extends Its Sales Streak -- Update
By Sarah Nassauer
Target Corp. posted another quarter of rising sales, saying it
continues to draw more shoppers and capture spending both in its
stores and online.
Sales in stores and digit channels operating for at least 12
months rose 4.5% in the quarter ended Nov. 2. E-commerce sales rose
31% in the period, with most of that growth coming from same-day
delivery or pickup, the company said.
Consumers continue to feel like spending, Target Chief Executive
Brian Cornell said in an interview. "We are starting to see the
bifurcation of winners and losers" in retail, he said.
Retailers reporting quarterly sales thus far provide conflicting
views on the health of the American consumer heading into the
pivotal holiday season. Home Depot Inc. and department store chains
Kohl's Corp. and J.C. Penney Co. have reported weak sales, but
Amazon.com Inc., Walmart Inc. and TJX Cos. have logged strong
Target's third-quarter results were better than Wall Street's
forecasts and the chain raised its profit forecast for the fiscal
year. Shares jumped 9% in premarket trading.
Home improvement chain Lowe's Co. reported weaker-than-expected
quarterly sales on Wednesday but raised its profit forecast and
said it would close some Canadian stores. Shares rose 3.6% in
Target, which has around 1,800 stores, is gaining market share
in the apparel, home and beauty categories, Mr. Cornell said. Those
categories have been helped by new in-house brands, store remodels
and changes to how Target staffs those areas to offer better
customer service, he said.
Consumer spending has been relatively robust this year, helped
by the strong U.S. economy, rising wages and low unemployment. The
National Retail Federation said it expects holiday sales to rise in
the range of 3.8% to 4.2% -- to about $730 billion.
Target on Wednesday raised its adjusted earnings per share
targets for the year to $6.25 to $6.45, compared with the prior
range of $5.90 to $6.20.
The Minneapolis, Minn.-based company expects stronger profits as
it sells higher-margin store-brand products and expands in
categories such as beauty that tend to be higher margin, said Mr.
In addition, he said, the profitability of its e-commerce sales
has improved as Target has shifted its fulfillment system away from
distribution centers to one based on compiling orders from nearby
Target's total revenue rose 4.7% in the quarter to $18.7
billion, up from $17.8 billion during the same period last year.
Net income from continuing operations rose 14.5% to $706 million
during the quarter, up from $616 million during the same period
Write to Sarah Nassauer at firstname.lastname@example.org
(END) Dow Jones Newswires
November 20, 2019 08:12 ET (13:12 GMT)
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