Target reports earnings from holiday sales in early Q4 2024

Goal raised its fourth-quarter sales forecast on Thursday after more consumers visited its stores and website for holiday shopping — especially on days known for deep discounts.

The big retailer now expects comparable sales to rise about 1.5% in the fiscal fourth quarter. That’s better than his latest looks that metric would be approximately flat. Comparable sales include sales on Target’s website and stores open at least 13 months.

Still, the Minneapolis-based discounter didn’t raise its profit outlook — an indication that customers are motivated to shop. Target expects fourth-quarter earnings per share to be in the range of $1.85 to $2.45, and full-year earnings per share in the range of $8.30 to $8.90. Target will report full fourth-quarter earnings results on March 4.

Goal lower your profit guidance in early November after announcing the biggest drop in earnings in two years and blaming some of its problems on weaker sales of discretionary goods and the costs of preparing for a short-term port strike in October.

Target’s report is the latest insight into a key season for the industry. The data so far suggests it has done better than expected, but investors have not been impressed. Lululemon, Abercrombie & Fitch and american eaglefor example, all raised their outlook for the fourth quarter Monday, but shares of some of those companies traded lower that day.

Nordstrom on Friday raised its sales forecast for the full yearbut only after a previous conservative view. And a department store rival Macy’s on Monday he said his sales would be at or slightly below the lower limit previously stated range between $7.8 billion and $8.0 billion.

The industry’s main trade group, the National Retail Federation, is expected to report its holiday sales outlook on Thursday.

Discounts and special offers remained a a significant driver of sales, as consumers emerge from more than two years of high inflation. It’s unclear how much the deals will cut into the profit margins of Target and other retailers, and whether sales will continue to improve if the promotions disappear.

In the combined months of November and December, Target said, total sales rose 2.8% and comparable sales rose 2% from last year. Digital sales were up nearly 9% compared to the holiday season a year ago.

Some of Target’s growth areas contributed to holiday sales. His subscription serviceTarget Circle 360, contributed to a more than 30% year-over-year increase in same-day deliveries in November and December. Sales through the company’s third-party marketplace, Target Plus, grew nearly 50% during that time.

Guest traffic increased nearly 3% during the two holiday months compared to the year-ago period as online and in-person visits increased, the company said. Target said December was the eighth consecutive month of year-over-year sales growth.

Target has made aggressive moves to attract selective shoppers. In May it was said that it would reduce prices for about 5,000 frequently purchased itemsincluding diapers, bread and milk. It then announced another wave of price cuts in October on more than 2,000 items during the holiday season, including cold medicine, toys and ice cream. The company said that will amount to more than 10,000 items with reduced prices this year until the end of the holiday season.

In a press release Thursday, Target said Black Friday and Cyber ​​Monday had record high sales. The company said discretionary categories, particularly apparel and toys, saw “significant sales acceleration” compared to the fiscal third quarter. These categories tend to have higher margins than staples like milk and paper towels, but they often go on sale during the holiday season.

In remarks at NRF’s annual “Big Show” conference on Monday, Target Chief Operating Officer Rick Gomez said the company saw a sharp jump in sales on promotional days like Circle Week, an event in early October that coincided with Amazon Prime Day.

“It was one of our biggest Circle Weeks that we’ve ever had,” he said. “But sales before the week and sales after the week were down. There was a drop in sales. The consumer was very intentional.”

He said American consumers are “working on a budget” but are still willing to splurge on special occasions like holidays or “must-haves.” For example, the retailer has sold nearly a million copies of Taylor Swift’s hardcover book about The Eras Tour, he said.

On Thursday, Target also announced several changes to its management team that will take effect in early February. Chief Store Officer Mark Schindele will retire after 25 years at Target and will be replaced by Adrienne Costanzo, who is currently Senior Vice President of Store Operations.

CIO Brett Craig will retire after 15 years at Target and will be replaced by Prat Vemana, chief digital and product officer. And Sarah Travis will become the company’s head of digital operations and revenue, a new leadership role, after serving as senior vice president of Roundel, Target’s advertising and social commerce business.

Target recently got a new chief financial officer: Jim Lee, the former deputy chief financial officer of PepsiCo, who took on the role at the end of September. He succeeds Michael Fiddelke, who is now Target’s chief operating officer.

Target is also in the process of changing leadership at the top of the company. In the fall of 2022, longtime Target CEO Brian Cornell, agreed to stay for another three years in a move that required the company’s management to lift the retirement age. Target has not yet announced when his contract will expire and who will be his successor.