Target said on Wednesday that comparable sales rose 17.2% in November and December as customers bought matching pajamas and gingerbread kits to celebrate a comfortable holiday at home during the pandemic.
While online sales remained robust, shoppers also visited Target stores and spent more money on the purchase than they did last holiday season. The combined transactions in Target stores and on its website increased by 4.3%, and average tickets increased by 12.3% year-on-year, the company said.
Despite strong results during the peak shopping season, Target’s sales growth slowed slightly compared to earnings in the third fiscal quarter. The slowdown underscores the challenge Target faces in the coming quarters. As more Americans get vaccinated, the company will have to show that it can withstand market share gains, even if 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 be closed on Thanksgiving 2021.
The retailer has chosen to keep the last Thanksgiving Day closed due to the health crisis. To spread sales and thin crowds, Target began sales weeks before Thanksgiving, which had previously been the starting point for searching for gifts and fillers. He also put several offers online.
Target said comparable digital sales doubled in November and December compared to the previous year, while comparable store sales rose 4.2%.
The target guide only includes sales in November and December, even if the fourth fiscal quarter will not end until 31 January. It will report full quarter results on March 2 in 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 $ 26.67 billion.
The target was one of the highlights of a successful retail industry. It reported impressive growth in sales and market share gains of $ 6 billion, as many other retailers were hit by temporary store closures and even went bankrupt during the pandemic. Because consumers have limited trips to the store, they spent more than a dollar on a handful of places, and they tended to be retailers, where they could get a gallon of milk by cleaning supplies and sweatpants in a single stop or in a single website.
As in previous months of the pandemic, target buyers continued to use the company’s fast, contactless online options. Its same-day lift service, Drive Up, has grown by more than 500%. Shipt’s targeted sales increased by more than 300% over the holidays.
Few retailers have reported their holiday sales so far, but Target has far outpaced the growth of e-commerce in the industry. According to Adobe Analytics, online purchases in the US over the holidays of 2020 increased by 32.2% compared to 2019, as more buyers bought from home during the pandemic.
Target also made strategic moves that paid off. He owns Shipt, a same-day home delivery service. Recently, he added fresh and frozen food to boarding, a same-day service that grew by more than 500% during the holidays. And it has expanded its range of private food and beverage labels, Good & Gather, with a premium line of gourmet pasta sauces and coffees as people cook more at home.
Household products and hard lines, which include sports equipment, were especially popular during the holidays. Both categories recorded increases in sales at the same store in the low range of 20% compared to a year earlier. In the short term, growth was fueled by electronics sales.
Comparable food and beverage sales increased by about 17 percent, Target said. Beauty and essentials increased the number of low-income teenagers, and clothing gained large single-digit gains.
Target said the sets of family sleepwear and Christmas tree ornaments were among its bestsellers. The retailer has also sold nearly 2 million of its Wondershop gingerbread houses.
The target shares, which have a market value of almost $ 100 billion, have gained almost 60% in the last year. The stock closed on Tuesday at 199.10 USD, not far from the maximum of 52.50 weeks, of 199.50 USD, which it set on Monday.