Target Sales Hit $23.8B in Q1
A year ago, Target Corp. saw a rapid uptick in digital sales as shoppers stayed at home in the early days of the Covid-19 pandemic. But so far this year, the company has seen an “enthusiastic return to in-store shopping,” CEO Brian Cornell said in a Wednesday morning call with investors.
For Target’s first fiscal quarter that ended May 1, total sales grew to $23.8 billion, marking a 23 percent increase compared to the same quarter last year. Part of that growth, Cornell said, was driven by in-store sales. Same-store sales, a widely watched retail metric that compares sales at stores on a yearly basis, grew by 18 percent in the first quarter.
As in quarters past, physical stores also fulfilled the bulk of digital orders, too. Three-quarters of the company’s digital sales were fulfilled by brick-and-mortar stores, Cornell said. Physical stores also fulfilled more than 95 percent of the company’s same-day services. Target has long embraced a “stores-as-hubs” model, where stores essentially serve as fulfillment centers for orders.
“The first quarter felt like a first step toward a post-pandemic world,” Cornell said in his opening remarks.
All told, Target’s net earnings hit $2.097 billion in the first quarter, up by a whopping 638 percent.
As more consumers get comfortable venturing from their homes, they’re also, apparently, investing in new clothes. “In terms of category performance, we saw the strongest growth in our apparel business,” said Christina Hennington, Target’s chief growth officer. That came after the company saw a “temporary dip in apparel sales last year,” she said.
It’s worth noting that Target has stiff competition in the retail space. Walmart, which reported its own first-quarter results on Tuesday, logged revenue of $138.3 billion for the quarter. Amazon, meanwhile, reported revenue of $108.52 billion in its first quarter.
What’s more, Target’s market share in the e-commerce space is comparatively small. Amazon dwarfs several brick-and-mortar brands in that respect. According to a report by eMarketer, Target currently has about 2.2 percent of the e-commerce market. That compares to Amazon’s 40.4 percent and Walmart’s 7.1 percent.
But Target execs are evidently optimistic for the future. The company has now resumed providing financial guidance for the year ahead. In Target’s first-quarter earnings report, officials said they expect to see “mid-to-high single digit growth” in comparable sales in the second quarter.