67.3 F
Fort Worth
Thursday, November 26, 2020
Business Target sees highly competitive holiday on the way

Target sees highly competitive holiday on the way

Other News

Left for dead, twice, RadioShack gets another shot online

SILVER SPRING, Md. (AP) — RadioShack, a fixture at the mall for decades, has been pulled from brink of death, again. It’s the most prized...

JC Penney sees bankruptcy protection exit by Christmas

NEW YORK (AP) — J.C. Penney believes it will emerge from bankruptcy protection before Christmas under a new ownership agreement that would save tens...

Petalo, not Charmin: Virus brings Mexican toilet paper to US

By JOSEPH PISANI AP Retail Writer NEW YORK (AP) — Toilet paper is back on store shelves. But you may not recognize some of the...

Mall owners close to buying JC Penney out of bankruptcy

By ANNE D'INNOCENZIO AP Retail WriterNEW YORK (AP) — Mall owners Simon Property Group and Brookfield Property Partners are close to a deal to...

NEW YORK (AP) — A cautious outlook on the crucial holiday season overshadowed progress Target made in bringing more customers to its stores, pulling its shares down sharply. The shares of other retailers fell as well, even though overall economic figures show people still spending.

Target reported higher customer traffic numbers and better sales at established stores as its investments in improving its stores and online capabilities appear to be paying off. But those changes, as well as its moves to cut prices and raise employee wages, are dragging down profits.

The discount chain reported a 21 percent drop in fiscal third-quarter profit.

Seeking to soothe investors, CEO Brian Cornell said that while the fourth quarter is “always competitive,” the retailer is entering the holiday period with “lots of confidence.”

“While the bulk of the season is still ahead of us, we are very happy to see how these early efforts have set the tone for the season,” Cornell said.

Overall U.S. retail sales rose at a solid pace last month, as people spent more at electronics, grocery, clothing and sporting goods stores. Retail sales increased 0.2 percent in October, the Commerce Department said, after a 1.9 percent gain in the previous month. The National Retail Federation trade group expects holiday sales to rise 3.6 percent to 4 percent and at least match the 3.6 percent growth of a year ago.

Target, like all traditional retailers, is in fierce competition with Amazon.com and needs to cater to the growing number of shoppers who transition seamlessly between store aisles and mobile phones when they shop.

But the company is in a stronger position than it was a year ago. Minneapolis-based Target had said in February that it would spend more than $7 billion to revamp its stores and online businesses over the next few years. Cornell says that those investments are either exceeding or meeting expectations.

Revenue at stores open at least a year rose 0.9 percent, better than analysts had predicted. It was also the second consecutive quarter that metric rose. Online sales rose 24 percent, and customer traffic was up 1.4 percent.

As part of that, Target is offering new store brands, eight of which are available for the first time this holiday season. That includes Hearth & Hand with Magnolia, a lifestyle brand from Chip and Joanna Gaines of HGTV’s “Fixer Upper.” Target now also has dedicated sales associates in areas like beauty and electronics.

Target is also rolling out and testing new delivery options, though it’s playing catch-up. It’s now shipping online orders from 1,400 of its 1,800 stores for faster delivery, and says it expects to ship more than 30 million items from its stores during the peak four weeks of the holiday season, up from 18 million last year. It’s testing same-day delivery (for a fee) at four New York City stores.

Target is also testing store-curb pickup for online grocery orders at 50 stores in the Minneapolis area. In comparison, Walmart has more than 1,000 stores that offer curbside pickup for online grocery shoppers and plans to double that figure next year.

“As much as Target is making progress, we believe it needs to be bolder and more creative,” Neil Saunders, managing director of GlobalData Retail, said in a report.

He noted that many legacy issues, such as a lack of stock control which leaves frequent gaps on shelves, also need to be fixed.

Target reported a third-quarter profit of $480 million, or 88 cents per share, for the period ended Oct. 28. That compares with $608 million, or $1.06 per share, a year earlier.

Earnings, adjusted for one-time items, came to 91 cents per share, or a nickel better than Wall Street had expected, according to a survey by Zacks Investment Research.

Revenue at $16.67 billion exceeded forecasts and was up from $16.4 billion in last year’s third quarter.

For the quarter ending in January, Target expects earnings per share of $1.05 to $1.25, shy of Wall Street projections for $1.27. The company expects full-year earnings of $4.40 to $4.60 per share. That compares with prior guidance of $4.34 to $4.54 per share.

Shares of Target Corp. were down more than 9 percent, or $5.65 to $54.44 in Wednesday trading.

Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on TGT at https://www.zacks.com/ap/TGT


close






Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

The rise and fall of Tab – after surviving the sweetener scares, the iconic diet soda gets canned

Tab, the Coca-Cola company’s original diet soda brand, is headed to the soda graveyard, joining retired brands such as Like, Leed and Limette. Coca-Cola has...

Several local Walmart Supercenters remodeled in time for holidays

Fort Worth and Arlington residents will soon get a first look at the newly remodeled Walmart Supercenters at 9500 Clifford Street, 8401 Anderson St....

Retail trade group sees solid holiday sales despite pandemic

By ANNE D'INNOCENZIO AP Retail Writer NEW YORK (AP) — The National Retail Federation, the nation's largest retail trade group, expects that holiday sales could...

Grapevine company acquires San Antonio family business

Grapevine-based Able Machinery Movers, a heavy machinery-moving and rigging company, announced Nov. 24 the acquisition of Diamond E Rigging, a family-owned rigging and heavy equipment relocation business...

Cholula is hot with $800M acquisition by McCormick and Golden Chick deal

Here’s some hot news. McCormick & Company Inc. (NYSE: MKC) on Nov. 24 announced that it has signed a definitive agreement to acquire the parent company...