Target reports holiday sales early Q4 2024 earnings

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

The big-box retailer now expects comparable sales in the fiscal fourth quarter to grow by about 1.5%. That’s better than his most recent outlook that metric would be about flat. Comparable sales include sales on Target’s website and stores open at least 13 months.

Still, the Minneapolis-based discounter did not raise its profit outlook — an indication that the deal motivated buyers. Target anticipates fourth-quarter earnings per share will range from $1.85 to $2.45 and full-year earnings per share will be between $8.30 and $8.90. Target will report full fourth-quarter results on March 4.

Target cut their profit guidance in early November after posting its biggest earnings loss in two years and blaming some of its problems on softer sales of discretionary merchandise and costs of preparing for a short life. harbor October strike.

Target’s report is the latest look at a crucial season for the industry. The data so far suggests it’s doing better than feared, but investors aren’t impressed. Lululemon, Abercrombie & Fitch and American Eaglefor example, all raised their fourth-quarter outlooks Monday, but the shares of some of these companies traded lower that day.

Nordstrom on friday raised its full-year sales forecastbut only after a previous conservative perspective. It rivals the department stores Macy’s on Monday it said its sales would be at or slightly below the low end of its previously declared 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 report on Thursday.

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

In the combined months of November and December, Target said, total sales rose 2.8% and comparable sales rose 2% year over year. Digital sales grew nearly 9% compared to last year’s holiday period.

Some of Target’s growth areas contributed to holiday sales. I know subscription serviceTarget Circle 360, contributed to an increase of more than 30% year on year in same-day shipments 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 from the year-ago period as online and in-person visits increased, the company said. Target said December marked the eighth consecutive month of year-over-year traffic gains.

Target has made aggressive moves to attract selective shoppers. In May, he said he would cut prices on about 5,000 frequently purchased itemsincluding nappies, bread and milk. And then it 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 it will hit more than 10,000 items with price cuts this year by the end of the holiday season.

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

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

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

He said American consumers are “working on a budget,” but are still willing to splurge on special moments like the holidays or on a “must-have item,” like Taylor Swift’s hardcover book on at The Eras Tour. The company sold nearly 1 million copies of the book in the first week of its release.

On Thursday, Target also announced several changes to its leadership team that will begin to take effect in early February. Chief Stores 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.

Chief Information Officer Brett Craig is retiring after 15 years with Target and will be replaced by Prat Vemana, the company’s chief digital and product officer. And Sarah Travis will become the company’s chief digital and chief revenue officer, a new leadership role, after serving as senior vice president of Roundel, Target’s advertising business and social commerce.

Target has hired a new chief financial officer: Jim Lee, PepsiCo’s former deputy chief financial officer, who stepped into the role at the end of September. He succeeded Michael Fiddelke, who is now Target’s chief operating officer.

Target is also on track for a leadership change at the top of the company. In the fall of 2022, longtime Target CEO Brian Cornell he agreed to stay for three more years in a move that prompted the company’s board to drop his retirement age. Target has not yet announced when his contract will end and who his successor will be.