Big changes help Target hit the bullseye in Q3
MINNEAPOLIS — Target chairman and CEO Brian Cornell says his marketing and merchandising changes at Target are paying off as the retailer reported better than expected traffic and sales in the third quarter.
For the quarter ended Nov. 1, Target reported a same-store sales increase of 1.9%. Net sales rose 2.1% to 17.6 billion. Earnings were 86 cents per share, compared with 79 cents a year earlier. Revenue fell to $17.61 billion from $17.73 billion a year ago.
“The third quarter marked the fourth consecutive quarter in which we have grown traffic, and Target’s sales growth continues to be led by our signature categories: Style, Baby, Kids and Wellness,” Cornell said “Our momentum is encouraging, especially in the face of stiffer prior-year comparisons. Our results highlight the benefit of a consistent, company-wide focus on our key strategic priorities, and that focus will continue to position Target well in the months and years ahead. As we look forward to the fourth quarter, our team is focused on strong execution throughout the holidays, and we are confident in our merchandising and marketing plans as we enter the most critical season of the year.”
The company raised its full-year earnings forecast for the second time in three months. The company said it now expects earnings of $4.65 to $4.75 per share for the year ending January.
Target says its digital channel grew sales by 20% and that increase contributed 0.4 percentage points to same store sales growth. Over the past several weeks Target has made several announcements making clear that this may be its most omnichannel holiday season ever, with more services online and in-store designed to add convenience and value for shoppers, including two new "click-and-mortar" programs.
Last month Target announced an aggressive new plan to lure shoppers this holiday season that includes free shipping on all orders and a new international website. The plan is part of Cornell’s efforts to restructure the company and revamp its digital and in-store offerings.
"Target is starting the season with momentum in our business, anchored by increased store traffic and strength in our signature categories of baby, kids, style and wellness. The work we’ve done throughout the past year puts us in a position to deliver the convenient services and differentiated product our guests count on from Target, especially during the holidays,” Cornell said. “I’m confident that guests will find an easy, inspiring, and most importantly, seamless experience at Target no matter how they choose to shop.”
Target’s results follow Walmart’s third-quarter report, which showed increased sales but lower profits. Target operates 1,805 stores and at Target.com.