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Target Corp. beat first-quarter earnings and revenue expectations with help from its digital sales capabilities as e-commerce grew by 141% during the period.
Target stock rose 0.2% in Wednesday premarket trading.
Target TGT, -1.10% reported first-quarter net income of $284 million, or 56 cents per share, down from $795 million, or $1.53 per share, last year. Adjusted EPS of 59 cents beat the FactSet consensus of 44 cents.
Revenue totaled $19.62 billion, up from $17.63 billion last year and ahead of the FactSet outlook of $19.02 billion.
Comparable sales grew 10.8% as the average basket total climbed 12.5%, due to more shoppers making fewer but bigger shopping trips, the company said.
Same-day services rocketed, with DriveUp and other programs that allow customers to buy-online and pick up orders in store or have them delivered growing a whopping 278%.
Target joins Walmart Inc. WMT, -2.12% and Home Depot Inc. HD, -2.95%, which also reported soaring digital sales as customers, socially distancing due to the coronavirus, turned to their computers and phones to shop for essential items.
For Target, the stay-at-home period was also a chance for consumers to see the investment that the company has been making in the food and beverage categories over the past few years. Sales in these items grew 20%.
“It’s one more reason for consumers to consolidate their shopping at Target,” Target Chief Executive Brian Cornell said during a call with the media. “Food rounds out the multi-category portfolio.”
Cornell said the company spent about $500 million on coronavirus-related expenses, including increased wages for frontline workers and enhanced safety and sanitation measures.
Walmart said it spent about $900 million, and Home Depot spent $850 million in the most recent quarter.
Target has already announced an extension to its wage increase of $2 per hour until July 4, an additional two months.
After periods of pantry-loading and purchasing of items to help with at-home activities, Cornell says customers made the shift to discretionary categories, including the depressed clothing category, as stimulus checks hit consumer bank accounts.
Still, the apparel category was down 20% for the quarter.
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“Last quarter was unlike anything I’ve ever seen,” Cornell said.
Target stock has rallied nearly 71% over the past year while the S&P 500 index SPX, -1.04% has gained 3% for the period.