Target Reports Holiday Sales Earnings Early in Q4 2024

Aim It raised its fourth-quarter sales forecast Thursday after more consumers turned to its stores and website for holiday shopping, particularly on days known for deep discounts.

The big-box retailer now expects comparable sales in the fiscal fourth quarter to grow about 1.5%. That’s better than his more recent outlook that the metric would be approximately flat. Comparable sales include sales on Target’s website and stores open for at least 13 months.

However, the Minneapolis-based discounter did not improve its profit outlook, an indication that the deals motivated shoppers. Target anticipates fourth-quarter earnings per share will range between $1.85 and $2.45 and full-year earnings per share will range between $8.30 and $8.90. Target will report full fourth-quarter earnings results on March 4.

Aim cut its earnings guidance in early November, after posting its biggest profit loss in two years and attributing some of its problems to lower sales of discretionary merchandise and the costs of preparing for a short-lived crisis. port strike in october.

Target’s report is the latest look at a crucial season for the industry. The data so far has suggested it was better than feared, but investors were unimpressed. lululemon, Abercrombie & Fitch and american eagleFor example, everyone raised their outlook for the fourth quarter Monday, but shares of some of those companies traded lower that day.

Nordstrom on Friday increased its sales forecast for the full yearbut only after a prior conservative perspective. And rival of department stores Macy’s on Monday said its sales will be at or slightly below the low end of its previously indicated range of between $7.8 billion and $8.0 billion.

The industry’s main trade group, the National Retail Federation, is expected to report its holiday sales summary on Thursday.

Discounts and sales events remain a important driver of sales, as consumers emerge from a more than two-year streak of high inflation. It’s unclear how much those deals will reduce the profit margins of Target and other retailers, and whether sales will continue to improve if the promotions disappear.

In the combined months of November and December, Target said, total sales increased 2.8% and comparable sales increased 2% year over year. Digital sales grew by almost 9% compared to the Christmas period of the previous year.

Some of Target’s growth areas contributed to holiday sales. Is subscription serviceTarget Circle 360, contributed to a more than 30% year-over-year increase in same-day deliveries in November and December. Sales through the company’s third-party marketplace, Target Plus, grew nearly 50% in that time.

Guest traffic increased nearly 3% during the two-month holiday period from the prior-year period as online and in-person visits increased, the company said. Target said December marked the eighth consecutive month of year-over-year traffic gains.

Target has taken aggressive steps to attract selective shoppers. In May, he said he would reduce prices on about 5,000 frequently purchased itemsincluding diapers, bread and milk. And then it announced another wave of price cuts in October on more than 2,000 items during the holiday season, including cold medicine, toys and ice cream. The company said that would equate to more than 10,000 items with price cuts this year by the end of the holiday season.

In a press release Thursday, Target said Black Friday and Cyber ​​Monday saw record sales. The company said discretionary categories, especially apparel and toys, saw a “significant acceleration in sales” compared to the fiscal third quarter. Those categories tend to be higher margin than essential products like milk and paper towels, but they often go on sale during the holiday season.

In remarks delivered at the NRF’s annual “Big Show” conference on Monday, Target Chief Operating Officer Rick Gomez said the company saw a strong increase in sales. on promotional days like its Circle Week, an event in early October that coincided with Amazon Prime Day.

“It was one of our most important Circle Weeks. that we’ve never had,” he said. “But sales before the week and sales after the week were lower. There was a drop in sales. “The consumer was being very intentional.”

He said American consumers are “working on a budget” but are still willing to spend on special moments like vacations or a “must-have item.” For example, the retailer sold nearly 1 million copies of Taylor Swift’s hardcover book about The Eras Tour, he said.

On Thursday, Target also announced several changes to its leadership team that will begin to take effect in early February. Chief Store Officer Mark Schindele will retire after 25 years at Target and will be replaced by Adrienne Costanzo, who is currently senior vice president of store operations.

Chief Information Officer Brett Craig will retire after 15 years at Target and will be replaced by Prat Vemana, the company’s chief digital and product officer. And Sarah Travis will become the company’s chief digital and revenue officer, a new leadership role, after serving as senior vice president of Roundel, Target’s social commerce and advertising business.

Target recently got a new chief financial officer: Jim Lee, PepsiCo’s former deputy chief financial officer, who took over in late September. He succeeded Michael Fiddelke, who is now Target’s chief operating officer.

Target is also headed for a leadership change at the top of the company. In the fall of 2022, former Target CEO Brian Cornell will agreed to stay for three more years in a move that required the company’s board of directors to remove its retirement age. Target has not yet announced when his contract ends and who his successor will be.