MINNEAPOLIS, Jan. 15, 2020 /PRNewswire/ --
- Comparable sales grew 1.4 percent in the November/December
period, on top of 5.7 percent comp growth last year. While sales
were below expectations, the Company is maintaining its previous
guidance for fourth quarter earnings per share.
-
- The fourth quarter is on track to be the Company's
11th straight quarter of comparable sales
growth.
- Comparable digital sales grew 19 percent in the
November/December period.
-
- Sales through Target's same-day fulfillment services (Order
Pick Up, Drive Up and Shipt) grew more than 50 percent from the
November/December period last year, driving approximately
three-quarters of the Company's digital sales growth.
- Continued strength in multiple categories was offset by
softer-than-expected performance in key holiday categories
including Electronics, Toys and portions of Home, which together
account for approximately one-third of the Company's holiday season
sales.
November/December comp sales performance by
category:
|
Apparel
|
Up approx.
5%
|
Essentials &
Beauty • Beauty
|
Up approx.
6%
Up approx.
7%
|
Food &
Beverage
|
Up approx.
3%
|
Home
|
Down approx.
1%
|
Hardlines • Toys •
Electronics
|
Down more than
3%
Approx.
flat
Down more than
6%
|
- During the holiday season, the Company continued to grow
market share across many of its core merchandise categories,
including Apparel, Beauty, Essentials and Food & Beverage,
based on Target's analysis of data from the NPD Group and
IRI.
-
- Despite approximately flat comparable sales, Target
continued to gain share in Toys during the holiday season, based on
data from the NPD Group.
- The Company now expects fourth quarter 2019 comparable sales
growth in line with its November/December performance of 1.4
percent. The Company is maintaining its previous guidance ranges
for fourth quarter GAAP EPS from continuing operations and Adjusted
EPS.
- For more background on holiday performance, please
visit:
https://corporate.target.com/article/2020/01/holiday-2019
Target Corporation (NYSE: TGT) today announced that
comparable sales in the combined November/December period grew
1.4 percent, on top of 5.7 percent growth in the same period
last year. Comparable sales growth was driven primarily by traffic,
combined with a small increase in average ticket. Comparable
digital sales grew 19 percent in the November/December period,
driven primarily by the Company's same-day fulfillment services
(Order Pick Up, Drive Up and Shipt), which together grew more
than 50 percent from the comparable period last year.
Brian Cornell, Chairman and Chief
Executive Officer of Target Corporation, said, "We faced challenges
throughout November and December in key seasonal merchandise
categories and our holiday sales did not meet our expectations.
However, because of the durability of our business model, we are
maintaining our guidance for our fourth quarter earnings per share.
We also remain on track to deliver historically strong full-year
results in 2019, including comparable sales growth of more than 3
percent and record-high EPS reflecting mid-teens growth compared
with last year.
For the Holiday period specifically, sales results came in below
our expectations as we experienced softer-than-expected performance
in areas of our business that are critical during the season,
including Electronics, Toys and portions of our Home assortment.
Because these categories account for a much higher portion of sales
during the holidays, they have a larger impact on our overall sales
growth as compared to the rest of the year. At the same time, we've
seen continued strength and market share gains in Apparel, Beauty,
Essentials and Food & Beverage. And in Toys, despite
approximately flat comparable sales, we continued to gain share
over the holidays, according to data from the NPD group.
Given the relative performance of higher-margin versus
lower-margin categories, our fourth quarter financial results will
benefit from a stronger-than-expected gross margin mix in our
holiday sales. In addition, our fourth quarter performance will
benefit from productivity improvements in our stores and supply
chain, as well as meaningfully lower clearance inventory compared
with a year ago. Altogether, we are maintaining our previous
guidance for Target's fourth quarter earnings per share, consistent
with the ranges we provided in our third quarter earnings release
and conference call.
I want to thank the entire Target team for all of their work to
transform Target's operational and financial model, which has
allowed Target to grow and thrive in a rapidly-changing retail
environment. As a result of their efforts, we've seen outstanding
performance in 2019 and we're confident we'll deliver another
strong year in 2020, reflective of our durable business model and
consistent with our long-term financial algorithm. This algorithm
is based on the ability of our business to generate annual sales
growth in the low-single digits, mid-single digit growth in
operating income, and high-single digit growth in earnings per
share."
Fourth Quarter and Full-Year 2019 Guidance
Target now expects fourth quarter 2019 comparable sales growth
in line with the Company's 1.4 percent performance during the
November/December period, compared with the prior range of 3 to 4
percent. This would translate to full-year comparable sales growth
of more than 3 percent.
The Company is maintaining its fourth quarter and full-year EPS
guidance as disclosed in the Company's third quarter earnings press
release. Specifically, in that release the Company anticipated
fourth quarter GAAP EPS from continuing operations of $1.55 to $1.75 and
Adjusted EPS of $1.54 to $1.74, with full year GAAP EPS from continuing
operations of $6.27 to $6.47 and Adjusted EPS of $6.25 to $6.45.
Leadership Announcements
Target also announced today the retirement of Executive Vice
President and Chief Stores Officer Janna
Potts. Potts has been with the Company for 30 years, serving
in a variety of leadership roles during that time. Most recently,
she played a critical role as the lead architect in the successful
rollout of an entirely new operating model for Target's nearly
1,900 stores, enhancing the retailer's focus on guest service and
fueling the growth of its digital business through a suite of
convenient store-based delivery and pickup options. She will remain
with the Company in an advisory role until May 1.
Effective immediately, Mark
Schindele has been named Executive Vice President and Chief
Stores Officer. He also will join Target's Leadership Team.
Schindele has been with the Company for nearly 20 years, most
recently serving as its Senior Vice President of Properties. In
that role, he was responsible for leading the Company's ambitious
remodel and small-format strategies, elevating the shopping
experience and introducing Target to new guests in densely
populated areas. Prior to that, Schindele held leadership positions
in Merchandising, Sourcing and Operations.
"Over the course of her 30 years with the Company, Janna has
made many significant contributions, including transforming the
role our stores play in delivering for our guests in this new era
of retail. We wish her the best as she prepares for retirement,"
said Cornell. "As we look ahead, I'm confident Mark brings the
right set of diverse experiences to realize even more potential for
Target. His passion for retail, Target and our team, coupled with
his understanding of our end-to-end business, make him
well-positioned to lead our Stores organization into 2020 and
beyond."
Additionally, the retailer announced that it is formalizing the
interim structure it announced for its Merchandising organization
in October with the appointment of Christina Hennington to Executive Vice President
and Chief Merchandising Officer, Hardlines, Essentials and
Capabilities, and Jill Sando to
Executive Vice President and Chief Merchandising Officer, Style and
Owned Brands, effective immediately. Both Hennington and Sando will
join Target's Leadership Team. This structure reflects the size,
scale and complexity of Target's multi-category commercial
businesses and operations. In their roles, Hennington and Sando
will collaborate closely with Stephanie
Lundquist, Target's Executive Vice President and President
of Food and Beverage, on the development and execution of a unified
Merchandising strategy for the retailer.
"Christina and Jill are seasoned leaders and incredibly talented
merchants, and during their respective tenures, both have driven
outstanding outcomes that compel guests to choose Target," said
Cornell. "The appointments we're making today with Mark, Christina
and Jill underscore the expertise and deep bench of talent we
continue to develop at Target, and I have every confidence in their
ability to create opportunities that will fuel future growth for
our Company."
Miscellaneous
Statements in this release regarding fourth quarter comparable
sales guidance, full-year 2019 earnings per share guidance and
expectations for 2020 financial performance are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to risks and
uncertainties which could cause the Company's actual results to
differ materially. The most important risks and uncertainties are
described in Item 1A of the Company's Form 10-K for the fiscal year
ended Feb. 2, 2019. Forward-looking
statements speak only as of the date they are made, and the Company
does not undertake any obligation to update any forward-looking
statement.
About Target
Minneapolis-based Target
Corporation (NYSE: TGT) serves guests at more than 1,800 stores and
at Target.com. Since 1946, Target has given 5% of its profit to
communities, which today equals millions of dollars a week. For the
latest store count or for more information, visit
Target.com/Pressroom. For a behind-the-scenes look at Target, visit
Target.com/abullseyeview or follow @TargetNews on Twitter.
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SOURCE Target Corporation