Target said Wednesday’s comparable sales rose 17.2% in November and December as customers bought matching pajamas and gingerbread sets to celebrate a cozy holiday home during the pandemic.
While online sales remained strong, shoppers also visited Target stores and spent more money on shopping than last holiday season. Combined transactions at Target stores and their website rose 4.3% and average revenue grew 12.3% year-on-year, the company said.
Despite the strong results obtained during the high shopping season, the growth rate of Target sales slowed slightly compared to the gains recorded in the third fiscal quarter. The slowdown highlights Target’s challenge in the next few quarters. As more Americans are vaccinated, the company will have to show that it can maintain market share gains, even when consumers feel more comfortable making numerous trips to smaller stores or returning to malls.
The pandemic can also permanently change the cadence of the holiday shopping season. Target said its stores will close on Thanksgiving Day 2021.
The retailer had chosen to remain closed last Thanksgiving due to the health crisis. To spread sales and reduced masses, Target began sales weeks before Thanksgiving, which had previously been the starting line for the search for gifts and sausages. He also put more of his offers online.
Target said comparable digital sales doubled in November and December compared to the previous year’s period, while in-store comparable sales grew 4.2%.
Target’s targeting includes sales only in November and December, though the fourth fiscal quarter won’t end until Jan. 31. He will report full quarter results on March 2 on a virtual investor day. Ahead of Wednesday’s news, analysts polled by Refinitiv estimated that Target would earn $ 2.27 per share, after adjustments, with revenue of $ 26.66 billion.
Target has been one of the brightest spots of a heavily affected retail industry. It has reported strong sales growth and earnings of $ 6 billion in market share, as many other retailers have been hit by temporary store closures and have even filed for bankruptcy during the pandemic. Because consumers have limited travel to the store, they have spent more of their dollars in a handful of places and these have tended to be large retailers where they can get a gallon of milk, cleaning supplies, and tracksuit pants at one or more stalls website.
As in the early months of the pandemic, Target shoppers continued to use the company’s fast, contactless online options. The same-day sidewalk pickup service, Drive Up, grew more than 500%. Shipt’s target sales grew by more than 300% over the holidays.
Few retailers have reported on their holiday sales so far, but Target has far outpaced the growth of the e-commerce industry. According to Adobe Analytics, online shopping in the U.S. during the 2020 holidays grew 32.2% as of 2019, as more shoppers bought from home during the pandemic.
Target has also made strategic moves that have borne fruit. He owns Shipt, a same-day home delivery service. Recently, he added fresh, frozen groceries to the sidewalk pickup, a same-day service that grew more than 500 percent during the holidays. And it has expanded the range of the private label Good & Gather, for food and drink, with a premium line of gourmet pasta sauces and coffees, as people cook more at home.
Household items and landlines, which include appliances and sports equipment, were especially popular during the holidays. Both categories recorded sales gains in the same store in a low range of 20% compared to the previous year. Within the hard lines, growth was driven by electronics sales.
Comparable food and beverage sales increased by about 17%, Target said. Beauty and essentials saw teenagers grow up low and clothes made big one-digit gains.
Target said family bedding sets and Christmas tree ornaments were one of her bestsellers. The retailer also sold about 2 million of its Wondershop gingerbread houses.
The target shares, which have a market value of about $ 100 billion, have gained about 60% over the past year. Shares closed Tuesday at $ 199.10, not far from the 52-week high of $ 199.50, which he set on Monday.