Ugly sweater display, oh my! Santa! I know him! From the movie “Elf”. On display at a Target store in Queens, New York.
Lindsay Nicholson | Getty Images
target The company raised its fourth-quarter sales forecast on Thursday as more consumers turned to its stores and website for holiday shopping, especially on days with deep discounts.
The major retailer now expects comparable sales to rise about 1.5% in its fiscal fourth quarter. This is better than the latest forecast for the index to be roughly flat. Comparable sales include sales on Target’s website and in stores open for at least 13 months.
However, the Minneapolis-based discounter did not raise its profit outlook. This shows that the deal is motivating shoppers. Target expects fourth-quarter earnings of $1.85 to $2.45 per share and full-year earnings of $8.30 to $8.90. Target is scheduled to release its full fourth quarter financial results on March 4th.
Target cut its profit outlook in early November after posting its biggest profit slump in two years, blaming some of its woes on weak sales of discretionary goods and preparation costs for October’s short-lived port strike. He claimed that.
Target’s report is the latest to offer a glimpse into an important season for the industry. Data so far suggests it has fared better than expected, but investors are unimpressed. lululemon, Abercrombie & Fitch and american eagleFor example, on Monday, companies raised their fourth-quarter outlooks, but some companies’ stock prices fell that day.
A Black Friday sale sign is seen at a Target store in Chicago on November 26, 2024, ahead of the Black Friday shopping day.
Kamil Krzaczynski | AFP | Getty Images
nordstrom On Friday, the company raised its full-year sales forecast, following a conservative outlook. and department store rivals Macy’s On Monday, the company said it expects revenue to be at or slightly below its previously stated range of $7.8 billion to $8 billion.
Holiday retail sales from Nov. 1 to Dec. 31 totaled $994.1 billion, up 4% from the same period last year, according to the National Retail Federation, the industry’s main trade group. This total does not include car dealerships, gas stations, or restaurants.
NRF Chief Economist Jack Kleinhenz said in a news release that the pace of spending is similar to pre-pandemic growth and is due in part to lower inflation compared to last year’s holiday season. From 2010 to 2019, vacation spending increased by an average of 3.6%.
Still, shoppers are still looking for bargains, he added.
“Consumers remain relatively healthy and remain budget-conscious despite significant increases in spending,” he said.
Discounts and sales events remain key sales drivers as consumers emerge from more than two years of high inflation. It’s unclear how much these deals will cut into Target and other retailers’ profit margins, or whether sales will continue to improve once the promotions are gone.
Target said total sales for the combined months of November and December were up 2.8% year over year, and comparable sales were up 2%. Digital sales increased nearly 9% compared to the previous year’s holiday period.
Some of Target’s growth areas contributed to the year-end sales season. The company’s subscription service, Target Circle 360, contributed to more than 30% year-over-year growth in same-day deliveries in November and December. Sales through Target Plus, the company’s third-party marketplace, have increased nearly 50% during that time.
The company said guest traffic increased nearly 3% year-over-year during the two holiday periods due to an increase in online and in-person visits. According to Target, December was the eighth month in a row that traffic increased compared to the same month last year.
Target is making aggressive moves to attract select shoppers. In May, the company announced price cuts on about 5,000 frequently purchased items, including diapers, bread and milk. And in October, it announced further price cuts during the holiday season on more than 2,000 items, including cold medicine, toys and ice cream. According to the company, more than 10,000 items will be reduced in price this year by the end of the year-end sales season.
Black Friday signs are held at a Target store ahead of Black Friday on Tuesday, November 21, 2023 in Smyrna, Georgia, USA.
Ilya Nouberge | Bloomberg | Getty Images
Target said in a news release Thursday that Black Friday and Cyber Monday sales hit record highs. The company said it saw “significant sales acceleration” in discretionary categories, particularly apparel and toys, compared to the fiscal third quarter. These categories tend to have higher margins than staples like milk and paper towels, but they often go on sale during the holiday season.
Target’s Chief Operating Officer Rick Gomez said in remarks Monday at NRF’s annual conference, “The Big Show,” that the company will continue to support promotional days such as “Circle Week,” an event held in early October that coincides with Amazon Prime Day. He said the company’s sales have soared.
“This was one of the biggest circle weeks we’ve ever had,” he said. “But sales before the week and sales after the week were low. There was a dip in sales. Consumers were very intentional.”
He said U.S. consumers are “working on their budgets,” but are reluctant to spend money on special moments like holidays or “necessities,” like a hardcover book about Taylor Swift’s Elas tour. He said that he is interested in The company sold nearly 1 million copies of the book in its first week of release.
On Thursday, Target also announced several changes to its management team that are scheduled to take effect in early February. Chief Store Officer Mark Schindel is stepping down after 25 years at Target and will be replaced by Adrian Costanzo, currently Senior Vice President of Store Operations.
Chief Information Officer Brett Craig is retiring after 15 years at Target and will be replaced by Pratt Vemana, the company’s chief digital and product officer. And Sarah Travis will take on a new leadership role as the company’s chief digital and revenue officer, after previously serving as senior vice president of advertising and social commerce at Roundel, Target.
Target recently hired a new chief financial officer. Jim Lee, PepsiCo’s former deputy chief financial officer, took over in late September. He succeeds Michael Fidelke, who currently serves as Target’s chief operating officer.
Target is also on track for a leadership change at the top of the company. In the fall of 2022, Target’s longtime CEO Brian Cornell agreed to stay on for three more years in a bid to get the company’s board to eliminate the retirement age. Target has not yet announced when the contract ends or who will replace him.
