Target said on Wednesday that comparable sales increased 17.2% in November and December, with customers buying pajamas and gingerbread house kits to celebrate a cozy holiday at home during the pandemic.
While online sales remained robust, customers also visited Target’s stores and spent more money per purchase than last holiday. Combined transactions at Target stores and on its website increased 4.3% and average tickets grew 12.3% year on year, the company said.
Despite strong results during the high shopping season, Target’s sales growth pace has slowed slightly compared to the gains recorded in the third fiscal quarter. The slowdown highlights the challenge that Target will face in the coming quarters. As more Americans are vaccinated, the company will have to prove that it can maintain gains in market share, even if consumers feel more comfortable doing several trips to smaller stores or returning to shopping malls.
The pandemic can also permanently alter the pace of the Christmas shopping season. Target said its stores will be closed on Thanksgiving Day 2021.
The retailer chose to remain closed on the last day of Thanksgiving due to the health crisis. To distribute sales and reduce crowds, Target started sales weeks before Thanksgiving, which was previously the starting line for gift searching and storage. It also posted more offers online.
Target said comparable digital sales more than doubled in November and December compared to the same period last year, while sales in comparable stores grew 4.2%.
Target’s guidance only includes sales in November and December, although its fourth fiscal quarter does not end until January 31. It will present the results for the full quarter on March 2 on a virtual investor day. Before Wednesday’s news, analysts polled by Refinitiv estimated that Target would earn $ 2.27 per share, after adjustments, on revenue of $ 26.67 billion.
Target has been one of the strengths in a hard-hit retail sector. She reported impressive sales growth and $ 6 billion in market share gains, as many other retailers were hit by temporary store closures and even filed for bankruptcy during the pandemic. As consumers have limited trips to stores, they spend more than their dollars in various places and tend to be large retailers, where they can get a gallon of milk, cleaning products and sweatpants, all in one local stop on the Internet. .
As in the early months of the pandemic, Target buyers continued to use the company’s fast, contactless online options. Its sidewalk collection service on the same day, Drive Up, grew by over 500%. The sales target met by Shipt grew more than 300% during the holidays.
Few retailers have reported end-of-year sales so far, but Target has far outpaced the sector’s e-commerce growth. According to Adobe Analytics, online shopping in the U.S. during the 2020 holiday increased 32.2% compared to 2019, as more buyers bought home during the pandemic.
Target also made strategic moves that paid off. She owns Shipt, a same-day home delivery service. She recently added fresh and frozen groceries to the sidewalk collection, a same-day service that grew by over 500% during the holidays. And it expanded the assortment under its own food and beverage brand, Good & Gather, with a premium line of sauces and coffees for gourmet pasta, as people cook more at home.
Household goods and hard lines, which include household appliances and sports equipment, were especially popular during the holidays. Both categories saw same-store sales gains of 20% compared to the previous year. Within hard lines, growth was driven by sales of electronics.
Comparable sales of food and beverages increased by about 17%, Target said. Beauty products and basic items had a growth in the low range of teenagers and clothing had high single digit gains.
Target said the sets of pajamas and Christmas tree decorations are among its best sellers. The retailer also sold nearly 2 million of its Wondershop gingerbread houses.
Target’s shares, which have a market value of nearly $ 100 billion, were up almost 60% last year. The stock closed Tuesday at $ 199.10, not far from its 52-week high of $ 199.50, set on Monday.