Target’s comparable store sales for the holidays soar 17% as it retains some of its pandemic gains

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Target said Wednesday comparable sales rose 17.2% in November and December, as customers purchased matching gingerbread pajamas and home kits to celebrate a comfortable vacation at home during the pandemic.

While online sales remained strong, shoppers also visited Target stores and spent more money per purchase than they did last holiday season. Combined transactions at Target stores and its website were up 4.3% and average tickets were up 12.3% year-over-year, the company said.

Stocks rose 1.2% in trading before the news broke.

Despite the good results of the peak buying season, Target’s sales growth rate slowed slightly from the gains recorded in the third quarter of the year. The deceleration underscores the challenge Target faces in the quarters to come. As more Americans get vaccinated, the company will need to prove it can maintain market share gains, even as consumers feel more comfortable taking frequent trips. in small stores or return to shopping centers.

The pandemic can also permanently alter the pace of the holiday shopping season. Target said its stores will be closed on Thanksgiving Day 2021.

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The retailer had chosen to remain closed on Thanksgiving due to the health crisis. To even out sales and cut down on crowds, Target started sales weeks before Thanksgiving, which was previously the starting line for finding gifts and gifts. He also put more of his offerings online.

Target said comparable digital sales more than doubled in November and December from a year earlier, while same-store sales rose 4.2%.

Target’s forecast only includes sales in November and December, although its fiscal fourth quarter won’t end until January 31. He will release full quarter results on March 2 during a virtual investor day. Ahead of 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 of a hard hit retail industry. It reported jaw-dropping sales growth and market share gains of $ 6 billion 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’ve spent more of their money in a handful of places and these tend to be big box retailers where they can get a gallon of milk, cleaning supplies. and sweatpants in one stop or one stop. website.

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As in the early months of the pandemic, Target shoppers continued to use the company’s fast, contactless online options. Its same-day pickup service, Drive Up, has increased by more than 500%. Shipt’s target sales increased by over 300% during the holidays.

So far, few retailers have reported holiday sales, but Target has far outpaced the industry’s e-commerce growth. According to Adobe Analytics, online shopping in the United States during the 2020 holidays was up 32.2% from 2019 as more shoppers shopped at home during the pandemic.

Target has also taken strategic steps that have paid off. She owns Shipt, a same day home delivery service. It recently added fresh and frozen groceries to the curbside collection, a same-day service that has increased by over 500% during the holidays. And it has expanded its private label food and drink assortment, Good & Gather, with a premium line of gourmet pasta sauces and coffees as people cook more at home.

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Housewares and hardlines, which include home appliances and sports equipment, were especially popular during the holidays. Both categories recorded comparable store sales gains of around 20% over the previous year. Within the hardlines, growth was fueled by electronics sales.

Comparable food and beverage sales rose about 17%, Target said. Beauty and basic necessities saw growth among teens, and clothing saw high single-digit gains.

Target said family sleepwear sets and Christmas tree ornaments were among its bestsellers. The retailer has also sold nearly 2 million of its Wondershop gingerbread houses.

Target stocks, which have a market value of nearly $ 100 billion, have gained nearly 60% in the past year. The stock closed at $ 199.10 on Tuesday, not far from its 52-week high of $ 199.50, which it set on Monday.

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