Target Corp. chairman and chief executive officer Brian Cornell said the retailer's second-quarter results validate its costly and far-ranging initiatives, which include transforming the supply chain, investing in the store experience and associate training and launching 12 new apparel and home brands.The discounter's net income slipped 1.2 percent to $672 million from $680 million a year earlier. But share buybacks boosted earnings per share to $1.22, from $1.07, beating analyst estimates of $1.19. The increase was driven by traffic growth of 2.1 percent.Sales in the quarter ended July 29 rose 1.6 percent to $16.4 billion from $16.2 billion on a 1.3 percent comparable-store sales gain. In the digital channel, comps rose 32 percent on top of 16 percent growth in the second quarter of 2016."We're very pleased with our second-quarter performance," Cornell said. "It gives us confidence."Investors were also reassured and pushed shares of Target up 3.6 percent to $56.31 on Wall Street.Cornell noted that the 12 new brands will replace $10 billion worth of business related to labels such as Merona and Mossimo, which Target is exiting. Cornell cited Cat & Jack as an example of the initiative's potential. The kids label, which was expected to be a $1 billion brand, hit the $2 billion mark in just over a year since its launch.Cloud Island, an infant brand that bowed at the end of May, is generating double-digit comp increases, Cornell said, adding that July's launch of Isabel Maternity by Ingrid & Isabel, is looking strong out of the gate. Launching in September are A New Day, a collection with a feminine bent and lots of prints and patterns; Goodfellows & Co., classic looks and core items for men, and Project 62, featuring modern home styles. JoyLab, based on emerging street styles, will bow in October."During a period of rapid transformation in retail, when many are shrinking, we're committed to continued progress against our long-term goals," Cornell said. "The pace of change doesn't show any signs of slowing down. We're able to [innovate]. It starts with the underlying health of our business with a profit of nearly $700 million in the second quarter."In line with its efforts to use technology to move into the future, Target this week acquired Grand Junction, a transportation technology company, with same-day delivery in the test phase at the flexible-format store in Manhattan's TriBeCa. "The basket size for same-day delivery is six times the average," Cornell said. "We plan to expand same-day delivery to other New York stores."Target is also testing curbside pickup and expanding the number of ship-from-store and pick-up-in-store locations, but competitor Wal-Mart is far ahead in these areas. The retailer is expanding its Restock service that offers next day replenishment of household items for a flat fee of $4.99. Following a Minneapolis pilot, Restock will be available in Dallas-Ft. Worth and Denver.Back-to-school and back-to-college comps and market share has grown for 10 years straight, Cornell said, adding, "We're partnering with Barnes & Noble College's 700 campus stores and five million students with specialized assortments."Target is also investing in its brick-and-mortar stores. The retailer plans to open 100 flexible-format doors, including 30 this year, and plans to remodel 600 units.Cornell said, “In particular, we are pleased that second-quarter traffic increased more than 2 percent, reflecting growth in both our store and digital channels. We continue to focus on our long-term strategy, as we work to transform every part of our business and build an even better Target that will thrive in this new era in retail.”Target is investing more than $7 billion in technology and supply chain over four years. The company invested nearly $500 million in technology in the first quarter. The retailer’s e-commerce performance has accelerated more quickly than the industry and Target plans to invest more in 2018.Capital expenditures for 2017 are expected to range from $2 billion to $2.5 billion, and for 2018, $3 billion or more. "We'll increase our investment where we've seen long-term returns," Cornell said.Facing a tougher prior-year comparison, third-quarter comps are expected to be flat, with full-year comps projected to range from flat to down 1 percent. EPS in the third quarter are projected to be 75 cents to 85 cents. Full-year guidance was raised to $4.35 to $4.55, an increase over previous guidance of $3.80 to $4.20.Gordon Haskett analyst Charles Grom, raised Target's rating from sell to hold, saying, "With top-line trends inflecting and coming in better-than-plan, led by digital, which was up 32 percent in the second quarter, and traffic, ahead 2.1 percent, Target has been able to cushion the blow of its initial investments."
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews