Target Corp.’s omni-channel strategy paid off during the holiday period when online orders picked up in stores and at drive-up areas fueled brick-and-mortar traffic. Based on solid results for the November and December holiday period, Target on Thursday said it was maintaining its guidance for the fourth quarter.
Same-store sales for the two months surged 5.7 percent compared with a 3.4 percent increase in the same period in 2017, driven by traffic and a small increase in average ticket sales. Store pick-up and drive-up grew 60 percent and accounted for one-fourth of the company’s total sales. Comparable digital sales shot up 29 percent and Target said it expects 2018 to be the fifth consecutive year in which its digital sales grew more than 25 percent. The retailer said it saw the strongest performance in toys, baby and seasonal gift items.
Brian Cornell, chairman and chief executive officer of Target, said, “We’re very pleased with Target’s holiday season performance, which came on top of really strong results in the same period last year. This performance demonstrates the benefit of placing our stores at the center of every way we serve our guests, including both in-store shopping and digital fulfillment.”
Given Target’s fourth quarter outlook, the retailer is poised to deliver its strongest full-year comp-store sales growth since 2005, Cornell said, adding that the company grew market share across all of its core merchandising categories and achieved double-digit growth in adjusted earnings per share.
“In 2019, we expect to build on this momentum as we gain further scale in our fulfillment capabilities and deliver profitable growth throughout the year,” Cornell said.
Target expects fourth quarter comp store sales growth of about 5 percent and full year adjusted EPS of $5.30 to $5.50. The retailer’s shares were on the rise Thursday morning, up more than 1 percent to $70.29 in pre-market trading on the New York Stock Exchange.
The retailer announced executive changes including the retirement of chief financial officer Cathy Smith, who will remain in the position until a successor is named. Chief marketing officer Rick Gomez was elevated to chief marketing and digital officer and will lead Target’s digital team, focusing on personalization, loyalty and the overall shopping experience. Mike McNamara, chief information officer, will oversee the enterprise data analytics and business intelligence team.
In addition, Melissa Kramer, senior vice president of human resources, was promoted to chief human resources officer and will join the Target Leadership Team. Katie Boylan, senior vice president of communications, was elevated to chief communications officer.