target Fiscal third quarter earnings were reported on Wednesday, slightly beating analysts ‘estimates as the discounter gained market share by turning shoppers’ pandemic habits into permanent profits.
The company said it had gained market share in all core categories from apparel to beauty. Since the beginning of the year, the company has gained $ 6 billion in market share, with stock gains of $ 1 billion in the most recent quarter. It measured profits using external and internal research.
Thanks to this strength, sales on the Internet and in stores open for at least one year increased by 20.7% in the third quarter. Comparable digital sales rose 155% while sales in the same store rose 9.9%.
Shares rose about 5% on Wednesday morning, hitting a 52-week high of $ 172.12.
Despite the strong results, Target declined to provide an outlook. The forecast was withdrawn in the first quarter as the coronavirus made it difficult to predict shopping habits.
This is how the company developed in the third fiscal quarter ending October 31:
- Earnings per share: $ 2.79, adjusted versus $ 1.60 expected from consensus among analysts polled by Refinitiv
- Revenue: $ 22.63 billion versus $ 20.93 billion expected from Refinitiv
- Revenue in the same store: up 20.7% compared to 11.2% according to StreetAccount estimates
According to Target, net income for the third quarter rose from $ 714 million, or $ 1.39 per share, to $ 1.01 billion, or $ 2.01 per share, last year. Excluding items, Target earned $ 2.79 per share, well above what analysts had expected to earn $ 1.60 per share.
Total revenue increased 21% to $ 22.63 billion from $ 18.67 billion a year ago, beating analysts’ expectations of $ 20.93 billion.
While some retail competitors had to close in the first few months of the pandemic, Target’s nearly 1,900 stores remained open as a must-have retailer selling a wide range of goods, from gallons of milk to pajamas and laptops. In the past few months, as the malls’ competitors reopened, Target said it has kept customers and gained more of their wallets.
Customers shopped at Target more frequently in the third quarter, and when they did, they put more in their baskets, the company said. Combined transactions in the Target stores and on their website increased 4.5% year over year, while the average ticket increased 15.6% for the quarter.
Sales in all of Target’s product groups were higher in the third quarter than a year earlier. Electronics increased by more than 50%. Household items increased by a percentage in the mid-1920s. Clothing increased by almost 10%. And the other two categories, Essentials & Beauty and Food & Beverage, grew in old age.
The goal is to make long term games to get business back up in troubled department stores and highly competitive malls. The company announced last week that it will Open smaller versions of the Ulta Beauty stores In hundreds of stores with a curated selection of products from hair care and perfume to lip gloss. More than 100 of the stores are expected to open in the next year.
CEO Brian Cornell said on a call with reporters that clothing has been a bright spot and Target plans to get involved. Along with loungewear, sleepwear, and intimates, he said that children’s and men’s clothing performed well during the three month period.
“Clothing was one of our strengths [and] certainly one of the real highlights for our business throughout the quarter in terms of market share, and we see that continue into the year-end, “he said.
The aim is to measure market share gains using external and internal research. The methodology wouldn’t be more specific.
The big box retailer’s online options remain popular. Roadside pick-up service, Drive Up, increased more than 500%. Target’s home delivery service, Shipt, grew nearly 280%. Order pickup, an in-store option that allows customers to view online purchases in person, increased by more than 50%.
However, the pandemic changed the pace of sales and purchases by customers, Cornell said. With many schools and colleges starting the year with distance learning, Target kept merchandise on shelves and customers later shopped back to school, he said. Those purchases resulted in cost growth in the middle of 20% in September, he said.
Hours spent at home would have resulted in “oversized growth in electronics” such as the purchase of computer software, video games, portable electronics, and office equipment. And buyers bought more than usual in the home category as they replaced decor and bought kitchen supplies.
While the pandemic continues into the Christmas season, Target has started sales early and is trying to do so Differentiate yourself for security and convenience. The company said last month it would provide twice as much parking space for roadside pickups. Features have also been added to help customers during the normally busy times such as: B. a website tool that allows them to check if there is a line outside of their store and, if so, reserve a seat before visiting.
According to Cornell, customers have already started shopping for gifts, “but they still have a very long shopping list to complete over the next several weeks.”
“We expect them to decorate their homes,” he said. “We expect a lot of gifts as many families send gifts across the country and celebrate very differently than in the past.”
He added, “This is a holiday season when the guest will try to find a little joy.”