Retailers everywhere are struggling. But Minneapolis-based Target Corp. caught many by surprise on Wednesday, reporting notably strong sales growth for its first quarter.
Target’s overall sales were up 5.1 percent to $17.4 billion for its first quarter of 2019, which ended on May 4. Comparable store sales were up 4.8 percent and traffic in stores was up 4.3 percent.
“Comp store sales” is a closely-watched number for all retailers, comparing sales in stores that have been open for at least 12 months. Target’s comp stores sales numbers were better than those posted by either Walmart or Home Depot, two big retailers that also saw first quarter gains.
Target’s digital sales growth was up 42 percent for the quarter.
“Same-day fulfillment services (Order Pick Up, Drive Up and Shipt) drove well over half of the company’s digital sales growth,” Target reported.
The company’s operating income was up 9 percent while net income was up 10.8 percent.
Investors rejoiced, sending Target stock up 7.8 percent for the day to close at $77.56.
A new report on Wednesday from the New York-based Telsey Advisory Group gave the company credit for making strategic investments and offered a bullish view for its future: “Overall, we believe Target’s strategic transformation initiatives – price investment in everyday items, differentiating merchandising with new private brands, remodeling stores and investing in digital and delivery, including Shipt – are resonating with consumers. Target also stands to gain from ongoing industry consolidation.”
A recent report from New York-based Morgan Stanley argued “Target is establishing itself as a retail ‘survivor’ alongside Amazon, Walmart, and Costco Wholesale.”
Target’s comp store sales numbers stack up well compared to others that have reported first quarter results.
Richfield-based Best Buy Co. Inc. will report its first quarter results tomorrow.