NEW YORK — Target Corp. said Tuesday that last week was a winner for holiday sales, and that like many other retail chains around the country, it made up for ground it lost earlier in December.
This story first appeared in the December 31, 2003 issue of WWD. Subscribe Today.
For the fourth week of the month, the Minneapolis-based mass merchant said comps exceeded both the 5 to 7 percent forecast at Target stores and the 4 to 6 percent plan for the total corporation, which includes Marshall Field’s and Mervyn’s.
The better results helped Target offset some of the comparable-store sales softness it experienced earlier in the month, partly due to the three major snow days ruining business in the Northeast on two weekends. For the month-to-date, Target said comps are now tracking near the low end of its forecast at Target stores and below plan for the company overall. At the end of the third week of December, sales were tracking below plan in both cases, Target said.
Best-selling merchandise so far this month includes pharmacy, entertainment and domestic goods, while ladies’ and men’s apparel were among the weakest performing categories.
“We were surprised by the reported weakness in apparel sales at the Target division,” wrote Citigroup analyst Deborah Weinswig in a research note, “as we believe that newness and fashion — drivers of apparel sales this holiday season, in our view — are key characteristics of Target’s merchandise offering.”
Addressing the better overall sales, Weinswig said she believed “pent-up demand for holiday shopping helped to drive improvements at the Target division and the total corporation.” Also, Target’s report of robust gift card sales should “move at least 200 basis points of comps from December to January sales results,” as many of those cards are redeemed next month.
As noted Monday, many chains, including Macy’s, Fortunoff’s, J.C. Penney, and Wal-Mart, saw a strong pickup in traffic beginning the Saturday before Christmas. More upscale chains, such as Bloomingdale’s, Neiman Marcus and Nordstrom, experienced steady sales throughout the season. Online retailers have been reporting the highest gains.
“This has clearly been a much stronger holiday season than last year,” said Tracy Mullin, president and chief executive of the National Retail Federation. “Consumers have not only shown that they are ready to spend, but it appears they are spreading their spending more equally among diverse retail segments.?This is a great sign for the industry.”
The NRF continues to project that holiday sales will increase 5.7 percent over last year, and a good profit picture. “Retailers have done a great job of keeping their inventories under control this holiday season,” said Mullin.?“This will certainly help the holiday profit picture and limit the amount of clearance activity in early 2004.”
The NRF’s outlook for the season is based on its executive opinion survey of 50 retailers, conducted monthly. The survey was last conducted through December, ending last Sunday. “Looking ahead over the next six months, retailers are showing a great deal of confidence that the current sales environment will continue into the next year,” the NRF said.