Target's earnings smashed analyst expectations. Its revenue for the quarter jumped past $22 billion, and its online sales are booming – but more customers are visiting its stores, too.
- Target's total comparable sales were up 20.7% in the third quarter, the retailer said Wednesday.
- This was led by a massive e-commerce boom, with digital comparable sales rocketing 155% year-on-year, Target said.
- More customers are buying from Target online — but more people are visiting its stores, too, and their average basket price is bigger.
- Total revenue for the quarter reached $22.6 billion, an increase of 21.3% compared with last year.
Some retail giants have boomed during the pandemic as people buy more groceries, healthcare products, and cleaning materials — and Target is no exception.
Sales of electronics products in particular rocketed at the retailer, growing 50% in the quarter to October 31, it said Wednesday.
Total comparable sales were up 20.7%, smashing analyst expectations of an 11.31% increase, according to IBES data from Refinitiv.
This was led by a massive boom in Target's e-commerce division, with digital comparable sales rocketing 155% year-on-year, it said.
Around 15.7% of Target's sales in the quarter were made online. This is more than double the proportion made online a year ago.
It saw a five-fold increase in demand for its "Drive Up" service, where shoppers order on the Target app and staff bring items out to their car for contactless curbside pickup. Orders through Target's grocery delivery service were up more than 280%, it added.
Despite consumers shifting their buying behavior online during the pandemic, Target has continued to open new stores. The chain opened a record 29 small-format stores in the year to date, it said, as shoppers increasingly prioritize convenience and shopping locally.
The average basket size rose 15.6% year-on-year, and the number of visitors to stores was up by around 4.5%, it said.
As well as rising demand for electronics, people bought more apparel, homeware, and beauty products, the company said.
Target's back to school and Halloween offerings were well received, it said, and showed that holidays still matter to customers, despite the pandemic.
Target is preparing for the holiday season by prioritizing customer and staff safety, it said. Nearly all of its Black Friday deals will be available for a full week to limit the number of shoppers in store, and the company plans to expand its same-day delivery and collection options.
Total revenue for the quarter reached $22.6 billion, an increase of 21.3% compared with last year. Operating income was $1.9 billion, up 93.1% year-in-year.
Target has seen "unprecedented market share gains and historically strong sales growth, both in our stores and our digital channels," CEO Brian Cornell said.
Its adjusted EPS more than doubled to $2.79, more than 50% up on FactSet's estimate of $1.60.