(C) Reuters. FILE PHOTO: A shopping cart is seen in a Target store in the Brooklyn borough of New York, U.S., November 14, 2017. REUTERS/Brendan McDermid/File Photo
By Aishwarya Venugopal
(Reuters) – Target Corp (NYSE:TGT) on Wednesday posted quarterly sales that surged about 23%, raising hopes of booming demand through the year as consumers flock to stores and shop for more than just essentials.
Target shares rose 3% after the retailer also forecast growth in comparable sales for the last two quarters of the year, countering Wall Street fears of a sales drop, as it keeps pace with surging sales recorded during the pandemic’s peak.
With the reopening of the economy due to the vaccination drive; Target, like Walmart (NYSE:WMT) and Macy’s (NYSE:M), said shoppers are spending more on apparel and beauty products as they prepare to socialize and travel.
“With vaccinations rolling out across the country and consumers increasingly comfortable venturing out, we’ve seen an enthusiastic return to in-store shopping” Chief Executive Officer Brian Cornell told analysts.
Target’s focus in building its private label brands, including designer dress collection and activewear line All in Motion, is paying off, with sales from the business rising 36% in the first quarter, their best growth so far.
That also helped drive its overall apparel sales, which rose in the low 60% range.
Increased store traffic and surging digital sales, boosted by same-day delivery services, helped overall comparable sales for the first quarter grow by a better-than-expected 22.9%. Analysts were expecting a 9.93% rise, according to IBES data from Refinitiv.
“Stimulus turbo boosters will inevitably ebb, yet Target’s ability to win and retain consumers during and after COVID is what should hopefully serve them well into the future,” Evercore analyst Greg Melich wrote in a note.
Excluding items, Target earned $3.69 per share, $1.44 more than what analysts’ had estimated.
Target forecasts rising sales after bumper quarter as more Americans return to stores
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