Target Extends Its Sales Streak
November 20 2019 - 7:04AM
Dow Jones News
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 quarter, with most of that growth coming from same-day
delivery or pickup, the company said.
Consumers continue to feel like spending, Target CEO 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 Corp. 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
gains.
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 like beauty that tend to be higher margin, said Mr.
Cornell.
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
stores.
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 rose 15.5% to $706 million during the quarter, up from
$616 million during the same period last year.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
November 20, 2019 06:49 ET (11:49 GMT)
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