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Target holiday sales better than expected; makes exec leadership changes

Target
Target has nearly 2,000 stores across the U.S.

Target Corp. raised its fourth-quarter sales forecast on the heels of better-than-expected holiday sales.

The discounter also announces leadership changes across its stores, technology and digital teams, including a new chief stores officer. (Changes detailed after sales update.)

For the combined months of November and December, total sales at Target rose 2.8% and comparable sales were up 2% year-over-year. Digital sales rose nearly 9%. More than 97% of the company's sales were fulfilled by stores. 

Target said sales were driven by a nearly 3% increase in traffic, representing gains across both stores and digital channels. Both the Black Friday and Cyber Monday promotional periods saw record-high sales

Digital sales saw more than 30% growth in same-day delivery powered by its subscription service, Target Circle 360. In addition, the company registered nearly 50% growth in its third-party marketplace, Target Plus.  

Compared with its third quarter sales trends, Target said it saw a “meaningful” acceleration in discretionary categories during the holiday period most notably in apparel and toys. It also saw continued strength in beauty and frequency categories.

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"Our team delivered continued traffic growth and better-than-expected holiday-season performance, thanks to their focus on serving guests with an inspiring, easy, and joyous shopping experience," said Brian Cornell, chair and CEO, Target. 

Target held a series of promotional events during the holiday period which helped drive traffic. It also benefited from its exclusive merchandise partnership with superstar Taylor Swift. 

[READ MORE: Target partners with Taylor Swift for exclusive holiday merchandise]

Target now expects comparable sales in the fiscal fourth quarter to grow by about 1.5%, compared to its previous forecast of 0.2% growth. The retailer, however, did not raise its profit outlook, a sign that discounts fueled sales. Target still expects anticipates fourth-quarter earnings will range from $1.85 to $2.45 per share, with full-year earnings between $8.30 and $8.90 per share. 

Leadership Team Changes

Target is making the following changes to its executive leadership team.

Mark Schindele, executive VP and chief stores officer, will be retiring after 25 years with Target. He will be succeeded in the role by Adrienne Costanzo, senior VP, store operations, effective Feb. 2. To support a smooth transition, Schindele will move into a strategic advisor role and retire effective March 29.

As chief stores officer, Costanzo will lead more than 350,000 store team members and oversee the operations of Target’s nearly 2,000 locations across the U.S. She will report to Michael Fiddelke, executive VP and COO, and join Target's leadership team.

Brett Craig, executive VP and chief information officer, will retire after 15 years at Target. With his departure, Prat Vemana, executive VP, chief digital and product officer, will take on the role of chief information and product officer and remain on the leadership team. 

In his new role, Vemana will accelerate the company's technology strategy with a focus on furthering the use of automation, data and artificial intelligence to enhance the working and shopping experience. In addition to overseeing Target's technology roadmap, Vemana will continue to lead the company's user experience strategy and enterprise product function to speed development of technology solutions .

“This change will usher in new leadership to further strengthen the role technology plays in Target's strategy, including the company's operations,” the company said.

Sarah Travis, senior VP, Roundel and social commerce, will be promoted to executive VP and chief digital and revenue officer and join the leadership team. Travis is credited with growing the retailer's in-house media company, Roundel, putting it on pace to deliver nearly $2 billion in value to Target in fiscal 2024. 

“Her new role brings together the growing power of Target's e-commerce business with other revenue drivers — including Roundel and the company's social commerce efforts that inspire consumers to shop Target on new platforms — to fuel each other's success and growth," the retailer stated.

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