Target hits the bull’s-eye with highest same-store sales growth in 13 years
Target has bucked the retail trend to publish strong sales growth today, reporting same-store sales that were higher than any it recorded in the past 13 years.
The New York-listed retailer, the second largest in the US, saw same-store sales grow 4.9 per cent year-on-year in the three months ending early August, with the company crediting increasing customer traffic to stores for the boost. Total revenue stood at $17.8bn (£13.8bn), up seven per cent year-on-year, with net earnings at $799m.
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Meanwhile, digital sales increased 41 per cent, up from 32 per cent growth a year ago, showing robustness in the face of Amazon's digital dominance, though its online channels still only accounted for 5.6 per cent of sales. In July Target held a substantial online sale as direct competition to Amazon's Prime Day.
Online operations have received significant attention in Target’s investments, while the brand expects to spend $3bn on its logistics, expanding delivery services further after acquiring online grocery company Shipt for $550m last year.
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Brian Cornell, chairman and chief executive officer of Target, said:
"We are extremely pleased with Target's second quarter results, which demonstrate our guests' excitement for the enhanced and differentiated shopping experience we're building. We laid out a clear strategy at the beginning of 2017, and throughout this year we've been accelerating the pace of execution.
"We're on track to deliver a strong back half and we've updated our full-year guidance to reflect the strength of our business and the consumer economy. As we look ahead to 2019, we expect to achieve scale across the full slate of our initiatives – creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target to continue gaining market share."
Shares in morning trading after the announcement rose five per cent to $0.88, contributing to a 34 per cent rise this year.
Market conditions have proved challenging for the wider American retail sector, making Target's success even more pronounced. It is expected that collectively over 105m square feet (sq ft) of retail space will close by the year’s end, according to real estate analysis firm CoStar Group. Meanwhile, collapsed retailers Toys R Us and Bon-Ton have both filed for bankruptcy.