Target Corp.’s third quarter trounced Wall Street’s estimates as it continued to translate pandemic-fueled shopping trends into big profit and sales gains.
For the three months ended Oct. 31, the big-box giant posted adjusted earnings per share of $2.79 — a 105.1% improvement from the prior year’s $1.36 and well ahead of analysts’ predictions of $1.60 in EPS. Revenues surged 21.3% to $22.6 billion, which also soundly beat market watchers’ forecasts of $20.93 billion.
What’s more, comps soared 20.7% in the period, reflecting in-store sales growth of 9.9% and digital sales gains of 155%. Same-day and contactless services — counting the chain’s order pickup, drive up and Shipt offerings — jumped 217%. (More than 95% of Target’s third-quarter sales were fulfilled by its stores.)
“Our strong results in 2020 reflect the benefits of our multiyear effort to build a durable and flexible model, with a differentiated assortment and a suite of industry-leading fulfillment options — all brought to life through the passion and effort of our team,” chairman and CEO Brian Cornell said in a statement. “As a result, we’ve seen a deepening level of engagement and trust from our guests. The result is unprecedented market share gains and historically strong sales growth, both in our stores and our digital channels.”
According to the Minneapolis-based company, it has continued to increase market share across all five of its core merchandising categories: home, apparel, food and beverage, hardlines and essentials. Target noted that it has picked up more than $6 billion in market share year-to-date.
As it prepares for heightened demand during the holiday shopping season, Target has introduced new features to its locations. It installed contactless self-checkout through the use of Wallet, the mobile payment option in its namesake app.
It also invited guests to visit Target.com/line to see if there is a line outside their local outpost, and if so, they can reserve a spot. They will then receive a text when it is their turn to enter the store.
“In a holiday season that will feel different for our guests, we’re committed to helping them navigate the season safely, as they find new ways to celebrate with family and friends,” Cornell added.
Today, the retailer announced that it has lifted the suspension of its share repurchase program, which it had done in late March as the COVID-19 health crisis took hold in the United States. It expects to resume share repurchases in 2021. At the end of the third quarter, Target had roughly $4.5 billion of remaining capacity under the program approved by its board last year in September.