Target Q3 sales gains roll on
In its third-quarter 2021 financial call, Christina Hennington, EVP and chief growth officer at Target, said virtually every product category grew sales, including all five of its core merchandising categories, each demonstrating “double-digit growth” in the low to mid-teens.
Private brands certainly played a role such as its Kindfull pet food and products launch helping to drive an essentials category (along with increases in baby care and OTC purchases) that saw a sales increase in the “mid-teens” compared with Q3 last year, Hennington said.
She added that fresh and frozen foods, and snacks and candy, an area where it’s been increasing its Favorite Day brand, helped the food and beverage category also grow sales in the “mid-teens” for Q3 2021.
Additionally, the hardlines category, fueled by toys and sporting goods saw comparable sales growth above 20%, and apparel grew in the low double digits, driven by record-setting performances across its back to school, back to college and Halloween products, she said.
Hennington made a special callout to its exclusive Lego partnership launching in December that will further push its toys and hardlines category sales around the holidays. She said more than 300 items from Lego-inspired clothing and accessories, as well as exclusive figure sets, will launch.
In total, the retailer reported that comparable sales jumped 12.7% for Q3 2021, on top of 20.7% growth last year. Same-store sales rose 9.7% — on top of 9.9% growth last year — and digital comparable sales grew 29%, following growth that reached 155% last year.
Brian Cornell, chair and CEO of Target, said during the call that traffic was the primary driver of its huge quarter, mentioning that since Q3 of 2019, Q3 store sales have expanded by $3.8 billion and digital sales increased another $3.1 billion.
Within digital, more and more guests are engaging with its same-day digital services. In fact, sales are up 400% over the last two years via its digital services and through first three quarters of the year, sales have grown more than $6 billion, a number larger than most prominent retailers, he said during the call.
“When we lead with our guests first, we continue to build upon the trust that we have carefully earned with them over time, and when our strategies our guest-led, we grow our business, which supports our team, our financial performance and our ability to give back to our communities and the planet,” Hennington said during the call.
She said the retailer is in a good position for the holiday season, following up on last year’s strategy to run promotions earlier and throughout November and December to prevent crowding in stores. She also reiterated the company’s first-ever price-matching guarantee.
In owned brands, she spotlighted that Target’s Gingerbread house kits join curated national brand items for the holidays and that consumers are focused on gathering with friends and family, whether it’s preparing a meal, throwing a festive party or hosting a game night, Target’s owned brands have options such as Good & Gather cheeseboards and starter kits, Favorite Day baked goods, and Threshold seasonal collections, serving platters, plates, linens and table toppers all $15 and under.
Hennington also said highlighted that this will be the first holiday season with its Ulta beauty partnership, which includes more than 500 brands, and Target is tripling the amount of stores with its Disney partnership and doubling the amount of stores with an Apple shop-in-shop.
“The consistently strong growth we’re seeing in our business, quarter after quarter, is a testament to the passion and commitment our team brings to serving our guests, and the trust we’ve built with them as a result,” said Cornell. “Following comp growth of nearly 21% a year ago, our third quarter comp increase of 12.7% was driven entirely by traffic, and reflects continued strength in our store sales, same-day digital fulfillment services and double-digit growth in all five of our core merchandising categories. With a strong inventory position heading into the peak of the holiday season, our team and our business are ready to serve our guests and poised to deliver continued, strong growth, through the holiday season and beyond.”