Target team delivers in Q3
Despite a back-to-school slow down early on, Target registered massive gains in the third quarter, growing sales by $4 billion and showcasing year-over-year sales growth of 21.3%.
Shoppers utilizing the retailer’s contactless drive-up and delivery services helped drive a lot of the growth in the quarter as Target saw digital comparable sales grow 155%, accounting for nearly 11% of Target’s comparable-sales growth.
Team members working to get items to shoppers' cars, homes and through Shipt delivered for the retailer as it saw same-day services such as order pick up, drive up and Shipt services grow 217% in the quarter.
Same-store sales results showed a 9.9% increase for the quarter. Total revenue surpassed $22 billion.
Talking to analysts, Target chairman and CEO Brian Cornell didn’t call attention to any particular private brand growth, but said the retailer is excited for the upcoming holiday season where it will be rolling out more than 600 exclusive items for the toy and gift-giving season and spotlighted the partnership with FAO Schwarz where 70 exclusive toys are available under $20.
Cornell also said going into the new year, the retailer will celebrate its one-year anniversary of the new activewear store brand All in Motion with new releases.
During the third quarter, Target said hardlines showed out with a more-than-50% increase in sales, driven by electronics, video games, office equipment and computer software. Home decor and style items drove a 20% gain in the home category and apparel was up 10%. Cornell said more than 95% of the retailer’s sales were fulfilled by its stores, with basket size increasing by 15.6%, and traffic by 4.5%. The retailer also reported gains on services related to e-commerce, with Shipt deliveries growing by nearly 280%, and same-day order pickup growing by more than 50%. Same-day drive-up delivery increased by more than 500%.
“Our strong results in 2020 reflect the benefits of our multi-year effort to build a durable and flexible model, with a differentiated assortment and a suite of industry-leading fulfillment options — all brought to life through the passion and effort of our team. As a result, we’ve seen a deepening level of engagement and trust from our guests. The result is unprecedented market share gains and historically strong sales growth, both in our stores and our digital channels,” Cornell said. “In preparation for the holiday season, we focused first on the safety of our guests and our team, making changes to eliminate crowds while enhancing our fast-growing, contactless options like in-store pickup, drive up and Shipt. In a holiday season that will feel different for our guests, we’re committed to helping them navigate the season safely, as they find new ways to celebrate with family and friends.”