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3 Months : From Oct 2019 to Jan 2020
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 gains.
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 premarket trading.
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. 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 from continuing operations rose 14.5% to $706 million during the quarter, up from $616 million during the same period last year.
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(END) Dow Jones Newswires
November 20, 2019 08:12 ET (13:12 GMT)
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