DISCUSSION
Has Target ‘only begun to scratch the surface of what’s possible’ for its business?
Written by George Anderson
Photo: RetailWire
Target’s second quarter was another one for the record books. The retailer posted an 8.9 percent gain in comparable sales (in-store and online), one year after it saw its revenues jump 24.3 percent. Earnings per share were also up 8.9 percent for the period.
Digital sales rose 10 percent for the chain, one year following a pandemic-driven jump of 195 percent. The company’s stores remain a focal point for this portion of the business with 95 percent of all sales fulfilled by associates in its more than 1,900 locations. Same-day services — in-store, Drive Up and same-day delivery via Shipt — continue to be a star for the chain, up 55 percent on top of last year’s 270 percent gain. Net promoter scores for all three services were up in the most recent quarter.
CEO Brian Cornell said yesterday on a call with analysts that the current success is another sign that the company’s “leadership position is stronger than it's ever been.” He said that the company had created a “durable model” with its investments in critical areas of the business, a strong team from bottom to top and a corporate culture focused on putting its customers first.
“After years of investment and effort in building this model, it's clear that we've only begun to scratch the surface of what's possible over time,” he said.
Mr. Cornell said “apparel continues to lead the way” with the chain’s customers responding positively to both Target’s owned brands as well as the national brands it carries, supported by store-within-a-store partnerships with Apple, Disney, Levi’s and Ulta Beauty.
The chain saw moderate growth in hardlines and home. Grocery’s performance was “impressive,” he said. Target’s same-day services have played a critical role in food and beverage sales growth.
Target Circle, the retailer’s loyalty program with more than 100 million members, and store remodels have helped drive increased traffic to the chain’s stores. Mr. Cornell said that more than half of all Targets have been remodeled over the past four years to elevate the shopping experience and optimize the ability of individual locations to meet increasing demands posed by same-day services.
“We've reinvented our store operating model, focusing on enhanced service and subject matter expertise in key categories while investing in visual merchandising across our network,” he said.