This post was originally published on this site
Target Corp. reported a record-setting second-quarter early Wednesday, with profits and comparable sales bolstered by market share gains and customer service options across digital platforms that drove shoppers to stores.
Target’s TGT, -0.48% net income totaled $1.69 billion, or a record $3.35 per share, up from $938 million, or $1.82 last year. Adjusted EPS totaled $3.38 per share, also a record. The FactSet consensus was for EPS of $1.63.
Revenue totaled $22.98 billion, up from $18.42 billion last year and ahead of the FactSet outlook for $19.97 billion.
Comparable sales soared a record 24.3%, with digital comparable sales nearly tripling, up 195%, and comparable-store sales up 10.9%. The retailer added 10 million new digital customers in the first half of the year.
The results sent Target’s stock surging 4.8% in premarket trading.
“In the current environment, each of our categories is operating very well,” Brian Cornell, Target’s chief executive, said on a call with media. Apparel made the biggest turnaround, according to Cornell, going from a 20% decline in the first quarter to double-digit growth in the second quarter.
Home was up more than 30% and electronics skyrocketed more than 70%.
Market share gains for the first half of the year totaled $5 billion, the company said, calling the outcome “unusually strong” in the earnings release.
The biggest change that Cornell noted in the quarter was that customers returned to stores. In-store pickup was up more than 60% for the quarter, and Drive Up, where items are placed in a customer’s car, was up more than 700%.
Shipt, which delivers items to customers’ homes, increased 350% from last year.
Also:Amazon Prime Day delay, back-to-school uncertainty is changing the shopping calendar
More than 90% of second-quarter sales growth involved stores, Target said.
Target’s private grocery label, Good & Gather, became a $1 billion brand less than a year after launching, joining others like kids brand Cat & Jack and home brand Threshold.
Good & Gather will be adding hundreds more items to its lineup, Cornell said.
Unlike Walmart Inc. WMT, -0.65% , which talked a lot about the impact that government financial stimulus had on shoppers and the business, Target focused on the investments in areas like same-day fulfillment and its portfolio that the company made before the coronavirus pandemic began.
“The stimulus was a factor, but we continue to see comp growth and we’re off to a strong start in August,” Cornell said.
Early August comparable sales are up in the low double digits, Cornell said, with back-to-school starting slowly. Target expects the holiday season to begin earlier, and the company is planning on a strong Halloween with customers spending the holiday closer to home and more focused on costumes and home décor.
Watch:Work from home is here to stay. Here’s what it means for retail.
Looking ahead, Cornell said Target is preparing for a “hard-fought election and a holiday that’s going to be unprecedented.” With COVID-19-related uncertainty in mind, the company has suspended guidance.
“As we reflect on an extraordinary second quarter, we know there’s a lot of work ahead,” he said.
Target stock has rallied 6.8% for the year to date while the S&P 500 index SPX, +0.23% is up nearly 5% for the period.
