Target quarterly sales rise again after historic year of COVID sales
Shoppers are returning to their normal buying habits, as evidenced by Target's first-quarter earnings report.
The Minneapolis-based retailer on Wednesday reported first-quarter comparable sales grew 22.9% on top of the 10.8% growth it saw last year.
And net profits grew from $284 million in Q1 last year to $2.1 billion in Q1 this year, which ended May 1, with Target noting in-store and digital traffic grew 17% during the first quarter.
“Our performance in the first quarter was outstanding on every measure, and showcased the power of putting our stores at the center of our strategy," CEO Brian Cornell said in a statement. "... Importantly, market-share gains of more than $1 billion in the first quarter, on top of $1 billion in share gains a year ago, demonstrate Target’s continued relevance with our guests, even as they have many more shopping options compared with a year ago.
Profits were driven by an increase in in-store and digital sales, with store comparable sales up 18% in Q1 on top of the 0.9% increase last year.
Meanwhile, digital sales continued its spike, seeing sales grow by 50% in Q1, on top of the whopping 141% growth digital sales saw in 2020 as shoppers avoided shopping in store during the onset of the pandemic.
The increase in digital sales was largely driven by Target's same-day services, like pickup, drive up and delivery, which grew more than 90% overall. Target's drive-up service saw the largest increase, with 123% growth.
In total, more than 95% of the company's first-quarter sales were fulfilled by its stores.
Target says sales growth was led by apparel, home and hardlines, with the retailer seeing a 36% growth in Target's own brands, which is the strongest it has ever recorded.
Meanwhile, food, beverage and essentials also grew on top of last year's "historic" sales numbers when shoppers were stocking up on goods — and all that toilet paper — early on in the COVID-19 pandemic.
Target notes that Mother's Day this year was among the strongest in years, showing shoppers continue to "seek joy and celebration."
"Our multi-category portfolio positioned us well to meet guests' pent-up demand for newness and differentiation as they celebrated both big moments and everyday life," an infographic notes.
And Target expects strong sales to continue this year.
“Given the trust we’ve built with our guests quarter after quarter and our commitment to adjusting along with them to the ongoing shifts in the macro environment, we're confident in continued comp growth in the second quarter and through the remainder of the year, as well as a healthy full-year operating margin rate," he added.
