Target exceeds expectations as digital sales and same-day services explode
The Minneapolis-based discount retailer earned $ 1.01 billion, or adjusted $ 2.79 per share, as revenue rose 21% to $ 22.34 billion. Wall Street analysts polled by Refinitiv expected adjusted earnings of $ 1.60 per share on revenue of $ 20.93 billion.
Digital comparable sales were up 155% from a year ago, accounting for 10.9 percentage points of comparable sales growth of 20.7%. Same-day services, which include order pickup, delivery service and shipping, were up 217%.
“Our good results in 2020 reflect the benefits of our multi-year efforts to build a sustainable and flexible model, with a differentiated assortment and a suite of industry-leading execution options,” said Target CEO Brian Cornell in a communicated.
Sales increased across all categories, with electronics increasing over 50%, falling in the 20% range, and clothing increasing almost 10%. The average ticket is up 15.6% from a year ago. Overall, the company said it gained $ 6 billion in market share.
Target has declined to provide updated guidance after withdrawing its outlook in the first quarter due to uncertainties caused by COVID-19.
The company increased its quarterly dividend from 2 cents to 66 cents per share and reinstated its share buyback program, which has remaining capacity of $ 4.5 billion.
Target stocks rose 27% this year through Tuesday, outpacing the S&P 500’s 18% gain.