Target sales soar as quick delivery fires up online demand

Target Corp holiday season sales jumped as Americans ordered everything from home goods, toys and groceries online, helping the company exceed Wall Street expectations with an 118% surge in digital sales for the quarter.

The company’s shares, which have gained over 80% in the last year, rose 2.5%.
Over the past year, Target and Walmart Inc consistently performed better than Wall Street expected as the deep-pocketed national retail chains amped up their online businesses during the health crisis and swiped market share from smaller rivals who rely more on their physical stores.

“The enormous investments we made in supply chain, store operations and technology capabilities are already powering exponential growth in digital commerce,” Target Chief Executive Officer Brian Cornell said on a call with investors.

Still, Target held back on providing sales and earnings forecast for fiscal 2021, citing continued uncertainty over consumer shopping patterns amid the health crisis.

The company’s comparable sales rose 20.5% in the fourth quarter ended Jan. 30, comfortably beating analysts’ estimates for a 16.4% rise, according to IBES data from Refinitiv.

Sales through its same-day deliveries and store pick-up services surged 212%, as consumers sought quicker ways to get their online purchases and government stimulus helped carry holiday spending momentum into January.

Analysts have, however, warned that the torrid pace of growth would be difficult to repeat in the coming months, as COVID-19 vaccine rollouts raise the promise of a return to something closer to pre-pandemic life.

Total fourth-quarter revenue rose 21.1% to $28.34 billion, beating average estimates of $27.48 billion. Full-year sales rose by over $15 billion, larger than the combined growth of the last 11 years.

On an adjusted basis, Target reported earnings of $2.67 per share, beating estimates of $2.54.