Target, TJX Sales Surge as Shoppers Return -- Update
May 19 2021 - 12:50PM
Dow Jones News
By Sarah Nassauer and Suzanne Kapner
Target Corp., Lowe's Cos. and the owner of T.J. Maxx reported
robust sales and a jump in store visits during the spring, as
Covid-related restrictions eased and people returned to shopping at
physical stores.
The strong results posted Wednesday followed similar reports
earlier this week from other national chains, including Home Depot
Inc. and Macy's Inc. Many of these retailers benefited during the
pandemic from being able to stay open and the shift to online
orders, or they are now capturing pent-up demand as they
reopen.
"The first quarter felt like a first step towards a
post-pandemic world, " said Target Chief Executive Brian Cornell on
a call with analysts Wednesday. "With vaccinations rolling out
across the country and consumers increasingly comfortable venturing
out, we've seen an enthusiastic return to in-store shopping," he
said.
At Target, comparable sales -- those from stores and digital
channels operating for at least 12 months -- rose 23% from a year
earlier in the quarter ended May 1. The growth rate was twice that
of the same quarter last year when people rushed to buy food and
household staples early in the pandemic.
Larger rival Walmart Inc. reported comparable sales rose 6% in
its latest quarter, a slightly smaller gain than in the
year-earlier period. Walmart executives said sales benefited from
government stimulus checks and pent-up consumer demand.
TJX Cos., which owns T.J. Maxx, Marshalls and HomeGoods,
reported on Wednesday first-quarter sales that were up 16% from the
same period last year and up 8.7% from 2019.
Strong sales, particularly of apparel, signaled that consumers
are "beginning to resume more normal activities," said TJX Chief
Executive Ernie Herrman. He said sales trends for the start of the
second quarter remained strong.
TJX suffered during the pandemic because only a small portion of
its sales are digital. Sales at the division that houses T.J. Maxx
and Marshalls, which mainly sell apparel, increased 12% in the
latest quarter, while its HomeGoods division posted 40% growth from
a year earlier.
Lowe's said its comparable sales rose 26% in the quarter ended
April 30, as people continued to buy home-improvement items, one of
the biggest product category winners during the pandemic. Home
Depot's most recent quarterly comparable sales were up 31%.
Target booked gains across categories, while its results also
suggested changes in buying behavior as more people ventured out or
hosted social events. Apparel sales rose more than 60%, Target
said, and sales of home goods and hardlines, such as small
appliances, rose more than 30%. Sales of food and home essentials,
big winners last year, increased by a few percentage points.
The company's overall sales through digital channels increased
50% in the most recent quarter, a slowdown from the same period
last year when sales grew 141%. Store visits rose 17%, year over
year.
Target reported quarterly earnings of $2.1 billion, up from $284
million a year earlier, lifted by strong sales of higher margin
items such as apparel and store brands. Total revenue rose 23% to
$24.2 billion.
For the current quarter, Target expects comparable-sales
percentage growth in the mid-to-high single digits.
Worker shortages affecting many retailers and restaurants aren't
being felt at Target, Mr. Cornell said, because of wage investments
and other worker benefits. Target raised pay for hourly workers to
at least $15 an hour last year.
Write to Sarah Nassauer at sarah.nassauer@wsj.com and Suzanne
Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
May 19, 2021 12:35 ET (16:35 GMT)
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