As it caps a year of significant digital investments, Target Corp. today posted a mixed fourth quarter with earnings that beat estimates and revenues that fell short of expectations.
The Minneapolis-based firm posted adjusted earnings per share of $1.69, a gain of 10.6% over the same period last year and better than consensus bets of $1.65, while revenues advanced 1.8% to $23.39 billion versus the anticipated $23.49 billion. On the other hand, same-store sales for the period ended Feb. 1 improved 1.5%, and full-year comps jumped 3.4%.
Target has continued to invest billions of dollars toward modernizing its omnichannel strategy: Its same-day services have become a major business driver, accounting for more than 80% of its comps growth today, while its fleet of more than 1,800 outposts offer customers the option to place an order online and pick it up curbside, in stores or have it shipped to them directly.
“With eleven consecutive quarters of positive comparable sales growth, driven by healthy performance in both our stores and digital channels, Target’s results demonstrate that we’ve built a sustainable business model that drives strong top-line growth and consistent bottom-line performance,” chairman and CEO Brian Cornell said in a statement. “The strategic investments we’ve made over the past several years to elevate the shopping experience, curate our multi-category assortment at scale and deliver ease and convenience through our fulfillment capabilities are deepening our relationship with our guest.”
Target added that 2019 marked the sixth straight year in which its comparable digital sales have surged more than 25%. For the full year, it has forecast a low single-digit increase in comps and adjusted earnings per share in the range of $6.70 to $7. (It expects same-store sales gains in the low single digits and EPS of $1.55 to $1.75 for the first quarter.)
Over the holiday shopping season, Target joined several retailers that reported sluggish sales, including Macy’s, Kohl’s and JCPenney. It saw weaker-than-expected performance in electronics, toys and some parts of the home department — major categories that account for a higher portion of sales during the holidays — but strength in apparel, beauty, essentials and food and beverage.
Target was set to host today its in-person investor meeting in New York City but canceled the event due to concerns over the deadly coronavirus outbreak, which has infected at least one person in Manhattan as of Tuesday morning.
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