Target is the latest retailer to stumble with its holiday sales.
The big-box retailer’s stock is down more than 6% to $117.50 in Wednesday morning trading after the firm posted holiday revenues that missed the mark.
Comparable sales for the final two months of 2019 rose 1.4%, versus the 5.7% gain in the same period last year. Additionally, its digital sales climbed 19% (compared with last year’s 29% jump), helped by same-day fulfillment services, including “buy online, pick-up in store” as well as Drive Up and Shipt grocery delivery — all told advancing more than 50% from 2019.
“We faced challenges throughout November and December in key seasonal merchandise categories, and our holiday sales did not meet our expectations,” said Chairman and CEO Brian Cornell.
The company saw weaker than anticipated performance in electronics, toys and some parts of the home department — major categories that account for a higher portion of sales during the holidays. Target, however, noted strength in the apparel, beauty, essentials and food and beverage departments.
Along with the announcement, the Minneapolis-based chain cautioned that its overall fourth-quarter growth, including January, is expected to be in line with the 1.4% comps it saw during the holiday period — or less than half of the 3% to 4% improvement that it had forecasted.
Despite the disappointing sales, Target maintained its previous outlook for earnings per share during the fourth quarter, predicting adjusted EPS of $1.54 to $1.74. For the full year, adjusted EPS is expected in the range of $6.25 to $6.45. It also announced the appointment of Mark Schindele, who replaces chief stores officer Janna Potts, to oversee the retailer’s fleet of nearly 1,900 stores.
Target joins several other retailers that have reported sluggish sales, including Macy’s, Kohl’s and JCPenney. The nationwide chains logged a decline in sales for the months of November and December, which have three of the biggest shopping days of the year: Black Friday, Cyber Monday and Super Saturday, the last Saturday before Christmas.
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