Pandemic Boosts Target's Growth, at Rivals' Expense
By Sarah Nassauer
Covid-19 helped Target Corp. get much bigger.
Target said holiday sales rose solidly during the latest
quarter, capping off a year when the Minneapolis-based retailer
increased revenue by more than it had in the previous 11 years
Comparable sales, those from stores and digital channels
operating for at least 12 months, rose 20.5% in the quarter ended
Jan. 30, boosted by strong demand for online services, including
same-day online order pickup and delivery. Over the full year,
revenue hit $93.6 billion, a nearly 20% increase over the previous
"Following years of investment to build a durable, scalable and
sustainable business model, we saw record growth in 2020," said
Chief Executive Brian Cornell.
In recent years Target has ramped up investments in online
services. Instead of spending heavily to establish a massive
network of online fulfillment warehouses, Target has used stores as
hubs to ship online orders or allow shoppers to pick up online
orders from store parking lots. Over the past year around 95% of
sales came from store fulfillment, the company said Tuesday.
Digital comparable sales more than doubled in the most recent
That model, as well as selling products in high demand during
the pandemic such as home décor, food and toilet paper, have helped
Target grab market share over the past year. Target, along with
many big-box retailers, remained open in the early days of the
pandemic while department stores and apparel retailers had to close
to in-store shoppers. Target estimates it gained around $9 billion
in sales from competitors, it said Tuesday.
Like other retailers that have fared well in the pandemic,
Target became more of an e-commerce-dependent company because of
it. For the full fiscal year, 18% of sales came from digital
channels, up from 8.8% last year. Last week Best Buy Co. said its
online sales rose almost 90% to $6.7 billion in the most recent
quarter and made up 43% of total U.S. sales, nearly double the
share in the same period last year.
Retailers have reported mixed results over the past year. Last
week Home Depot Inc. said revenue rose 20% in the latest fiscal
year as Americans spent heavily to fix up homes. Sales at Macy's
Inc. fell nearly 30% in the latest fiscal year as demand for
outside-the-home apparel fell.
Some retailers say Covid-19-style buying trends will persist
longer term, while other industry executives say shoppers will
return to more normalized buying patterns later this year, as more
people are vaccinated and return to spending on dining out or
Target said Tuesday it wouldn't share financial guidance for the
current year, citing "the highly fluid and uncertain outlook for
consumer shopping patterns and the impact of Covid-19." Many
companies stopped sharing financial guidance last year, citing
Profit rose in the most recent quarter. Net earnings hit $1.38
billion, up 66% from the same period last year. Earnings per share
for the quarter hit $2.67 compared with $1.69 in the same quarter
last year. Target will host an investor meeting Tuesday
Write to Sarah Nassauer at firstname.lastname@example.org
(END) Dow Jones Newswires
March 02, 2021 06:49 ET (11:49 GMT)
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