Target Q4 sales soar amid strong holiday season, stimulus checks

Target Corp. ended an impressive year on a strong note, with sales and earnings that topped analysts’ estimates as the discounter got a boost from holiday spending and $600 stimulus checks.

Target said its 2020 revenue grew by more than $15 billion — greater than its total sales growth during the prior 11 years. Total revenue for the fourth quarter (ended Jan. 30) rose 21.1% to $28.34 billion, above estimates of $27.41 billion. Total comparable sales increased 20.5%. Comp store-sales rose 6.9%, while digital comparable sales jumped 118%.

Net income rose to $1.38 billion, or $2.73 a share, up from $834 million, or $1.63 a share, in the year-ago period. Adjusted earnings per share was $2.67 compared to $1.69 last year, beating analysts’ estimates of $2.54. 

Target’s fourth-quarter traffic rose 6.5% and average ticket increased 13.1%. Same-day services (order pick up, drive up and Shipt) grew 212%, led by more than 500% growth in drive up. 

More than 95% of Target's fourth-quarter sales were fulfilled by its stores. The retailer said that 12 million more customers became multi-channel shoppers during the quarter. It noted that its multi-channel customers spend on average nearly four times more than a customer who shops only in stores and nearly 10 times more than a customer who only shops online. 

For the full year, Target’s revenue rose 19.8% to $93.6 billion. The company opened 30 stores in 2020, with a "record year of 29 new small-format stores."

“Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020, as our guests turned to Target to safely provide for their families throughout the pandemic," said Brian Cornell, chairman and CEO, Target. "With the strength of our unique, multi-category assortment and the flexibility we offer through our reliable and convenient fulfillment options, we gained nearly $9 billion in market share in 2020, and grew our revenue by $15 billion, which is more than the 11 prior years combined.” 

During the next 12 months, Target will be rolling out a number of initiatives to keep its momentum going, including the opening of 100 in-store Ulta Beauty shops. The company is also teaming up with Apple to open mini-Apple shops in 17 Target stores this month, with more to open in the fall.

“As we look ahead to 2021 and beyond, we see continued opportunity to invest in our business and our team, building on the strong foundation we've established to drive market share gains and deliver profitable growth for years to come,” Cornell said.

Target did not provide sales and earnings per share guidance for fiscal 2021 and beyond, citing continued uncertainty about the impact of COVID-19.