MINNEAPOLIS, April 23, 2020 /PRNewswire/ -- Target
Corporation (NYSE:TGT) today announced extensions of
enhanced team member wages and benefits, and provided business
updates related to the impact from the novel coronavirus
(COVID-19).
In recognition of the significant contributions of frontline
team members, Target will extend its $2 an hour temporary wage increase until
May 30. The Company will also
continue to extend access to free, safe and reliable back-up care
for team members, and a 30-day paid leave for team members who are
65 or older, pregnant or who have underlying medical conditions as
defined by the CDC, through the end of May. This follows a
previously-announced $300 million
investment in wages, bonuses, paid leave and benefits for its
frontline team members, as outlined in the Company's March 25 press release. These actions are in
addition to protective equipment, dedicated shopping hours and
discounts the Company has introduced to support its team members
during the pandemic.
"We have deep gratitude for the remarkable effort our team has
put into supporting guests across the country. We remain committed
to prioritizing our efforts to provide for their well-being so they
can take care of themselves and their families during this
unprecedented time," said Brian Cornell, chairman and CEO of
Target Corporation.
To enhance the safety of its stores and distribution centers,
Target has taken numerous actions, including providing face masks
and gloves to all team members, and implementing rigorous cleaning
and social distancing processes. Team members regularly receive
guidance to practice healthy hygiene habits, as recommended by
the CDC, and will be provided thermometers upon request to perform
at-home checks prior to coming to work.
Target is also monitoring store occupancy and metering traffic,
when necessary, to enhance the average space per person and reduce
the possibility of congestion, and setting aside time multiple
times each week for vulnerable guests to shop. Additionally, Target
has staffed up same-day services to accommodate increased guest
demand and offers a contactless Drive Up service for online
purchases across the country.
More information on how Target is supporting its guests and team
members in response to COVID-19 can be found
on Target.com/abullseyeview.
Update on Financial Performance
"Our strategy was built to be durable and sustainable in any
environment and its strength is driving our business in the face of
marked shifts in shopping behaviors caused by COVID-19," said
Cornell. "Because of our strong
business model, we are able to make considerable investments to
support our team, put protections in place, and adjust to serve our
guests who are being advised to shelter in place and avoid stores.
As a result, we are seeing record-setting digital growth, strong
demand for our same-day fulfillment services and broad market-share
gains across each of our core categories. While this crisis will
certainly put near-term pressure on our profitability, that
pressure is far outweighed by doing right by our team and our
guests. We're confident the actions we're taking today will drive
growth and greater guest affinity over the long-term."
Quarter-to-date, total Company comparable sales have grown more
than 7 percent, reflecting a slight decline in stores and more than
100 percent growth in digital channels. Across the Company's core
merchandise categories, comparable sales have grown more than 20
percent in Essentials and Food & Beverage, more than 16 percent
in Hardlines, increased slightly in Home and declined more than 20
percent in Apparel & Accessories. During the quarter, there
have been significant changes in shopping patterns, as guests have
reacted to the COVID-19 pandemic. Throughout this period, Target
has seen broad market-share gains across its core merchandising
categories.
- As previously disclosed in the Company's March 25 press release, for the month of
February, total Company comparable sales increased 3.8 percent with
strength across its entire multi-category portfolio. Late in the
month, Target saw an increase in traffic and comparable sales in
both its stores and digital channels as consumers began stock-up
shopping.
- Around the middle of March, there was an even stronger surge in
traffic and sales, while category mix became heavily concentrated
in the Essentials and Food & Beverage categories. Later in the
month, as guests across the country began to shelter in place,
sales trends in stores softened significantly while digital sales
accelerated dramatically. For the month in total, comparable sales
increased in the low double digits, reflecting mid-single digit
growth in stores and more than 100 percent in Target's digital
channels. Across the Company's merchandise assortment, March
comparable sales increased approximately 40 percent in both
Essentials and Food & Beverage, and by approximately 20 percent
in Hardlines. For the month, comparable sales declined in the low
single digits in Home and more than 30 percent in Apparel &
Accessories.
- In early April, sales trends were similar to late March, but
improved meaningfully beginning April
15. Month-to-date in April, comparable sales have increased
more than 5 percent, as store comparable sales have declined in the
mid-teens while digital comparable sales have increased by more
than 275 percent. Across core categories, month-to-date comparable
sales have grown more than 12 percent in both Essentials and Food
& Beverage, more than 30 percent in Hardlines and in the high
teens in Home, while declining more than 40 percent in Apparel
& Accessories.
While the Company withdrew its first-quarter guidance on
March 25, today it provided
additional detail on a number of factors that will reduce its first
quarter profitability, including investments in pay and benefits to
support team members during the COVID-19 crisis, the shift in
category mix towards lower-margin categories, the shift in channel
mix towards digital fulfillment, and inventory write-downs in
Apparel & Accessories to reflect the rapid deceleration in
sales trends. Together, these factors are expected to reduce the
Company's first-quarter operating margin rate by more than 5
percentage points.
Michael Fiddelke, executive vice
president and chief financial officer, said, "Over the last several
years we have strengthened Target's operational and financial
model, investing in our unique, multi-category merchandise
assortment, positioning our stores to fulfill every type of
shopping, and supporting and developing our team. Throughout this
crisis the response of our business, and especially our team, are
providing vivid evidence of the value of this model.
While we expect our short-term profitability to be affected by
COVID-19, we expect to have the financial capacity to emerge from
this crisis in a position of strength. Having established an even
stronger bond with our guests during this unprecedented time, we
expect to have a compelling long-term opportunity to grow
profitably and gain additional market share in the years
ahead."
Miscellaneous
Statements in this release regarding the expected profitability
in the first quarter as well as first quarter operating margin rate
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. 1,
2020. 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 Corporation
Minneapolis-based Target
Corporation (NYSE: TGT) serves guests at nearly 1,900 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.
For more on the Target Foundation, click here.
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SOURCE Target Corporation