Target Q2 Sales Turn Positive Driven By Gains In Store Traffic
Second quarter sales at Target were up 2.7% as the retailer reported traffic grains in its six core merchandising categories.
For the quarter ended August 3, total revenue was $25.5 billion, reflecting a total sales increase of 2.6% and a 10.8% increase in other revenue. Comparable store sales were up 2%. Net earnings in the quarter were $1.2 billion, an increase of 42.7% from the comparable quarter the previous year. Diluted earnings per share increased 42.4% to $2.57.
"We made a commitment to get back to growth in the second quarter, and the team delivered,” said Brian Cornell, chair and chief executive officer at Target. “Importantly, our growth was driven entirely by traffic in stores and our digital channels, with double-digit growth in our same-day delivery services. We also saw improving trends across our discretionary categories, most notably in apparel, and we're seeing continued strength in beauty.”
Data from Placer.ai shows store traffic at Target has rebounded in the late spring and summer months following a sluggish start to the year. Notably, traffic during Target’s Circle Week promotion (July 7 - July 13) was 6.8% higher than the weekly average for 2024 and outperformed 2023’s Circle Week promotion by 8.7%
“This demonstrates how the revamped loyalty program and exclusive sales events are successfully driving more customers to Target stores,” the report from Placer.ai said.
In the quarter, Digital comparable sales grew 8.7% and same-day services saw double-digit growth, led by low teen growth in Drive Up and Target Circle 360 same-day delivery. Discretionary sales trends continued to improve, with apparel comparable sales growing more than 3% in the quarter.
Target also continues investing in its real estate. The retailer opened 10 new locations and has 60 remodeling projects in process. Additionally, the company has opened three new supply chain facilities during the current fiscal year.
Looking ahead, Target is forecasting comparable store sales in the third quarter to be flat to up 2% with adjusted earnings per share between $2.10 and $2.40. The retailer will also be rolling out new fall flavors and more than 150 new owned brand items from Good & Gather, Favorite Day, and more.
