Target stores ‘stars of the show’ in blowout quarter
Target Corp. had a record-breaking first quarter as shoppers flocked to its stores and sales of its owned-brands reached an all-time high.
“Our performance in the first quarter was outstanding on every measure, and showcased the power of putting our stores at the center of our strategy,” stated chairman and CEO Brian Cornell. “Importantly, market-share gains of more than $1 billion in the first quarter, on top of $1 billion in share gains a year ago, demonstrate Target’s continued relevance with our guests, even as they have many more shopping options compared with a year ago.”
Target is on track to open more than 30 stores this year. It has more than 30 full remodels slated for completion in the second quarter and more than 100 planned for the back half of the year,”
The discounter’s net income jumped to $2.097 billion, or $4.17 per share, from $284.0 million, or $0.56 per share, in the year-ago period. Excluding items, the retailer earned an all-time high of $3.69 per share, blowing past the $2.21 per share expected by analysts.
Sales rose 23% to $23.88 billion, also ahead of estimates. Comparable-sales rose 22.9% with stores up 18% and digital comp sales up 50%. Basket size grew by 5%. Target said its owned brands experienced a record 36% sales growth.
Same-day services, including order pickup and drive-up, increased 90% year-over-year. Drive-up services had the biggest growth, rising 123%. Store fulfilled more than three quarters of Target’s digital sales
On a call with reporters, Cornell noted that Target’s stores served as fulfillment hubs for the chain’s advancing digital sales. All told, stores accounted for more than 95% of the company’s total sales.
“Our stores were the star of the show this quarter,” he said.
Target’s strongest category during the quarter was apparel, with sales rising by about 60% versus the year-ago period. Hardlines posted grew in the high 30% range and home sales grew in the mid-30% range. Sales of food and beverage and essentials has growth in the low-to-mid single digits.
On the company's earnings call, Cornell said consumers have become "increasingly optimistic" and are shopping for clothes again and returning to normal buying habits after a year of pandemic-related uncertainty. Notably, Target had its best Mother's Day in years.
"With vaccinations rolling out across the country and consumers increasingly comfortable venturing out, we've seen an enthusiastic return to in-store shopping," Cornell told analysts.