Target Corp reported a 17.2% rise in comparable sales for the holiday season on Wednesday as online sales more than doubled, thanks to faster deliveries and higher demand for home goods, electronics and beauty products.
A large chunk of the sales growth came from same-day deliveries and store pick-up services, areas where the Minneapolis-based retailer has been investing heavily during the COVID-19 pandemic.
Deep-pocketed retailers such as Target and Walmart Inc are using the disruption brought on by the health crisis as an opportunity to gain market share from smaller brick-and-mortar rivals and invest heavily in their online businesses.
Target’s sales through Shipt same-day delivery service jumped more than 300% in the November-December period, while demand at its Drive Up service where customers go to stores to collect their orders jumped more than six fold.
“While the retail dynamic created by the pandemic muddies the relevance of year-over-year comparisons… we expect Target’s superior execution ability to drive margins that will result in significant profitability for Q4,” Moody’s analyst Charlie O’Shea said.
The retailer’s store traffic also rose 4.3% during the holiday season as people combined their shopping trips and limited it to large retailers amid a surge in pandemic.
Target said sales trends so far in January has been strong. Analysts on average expect its fourth-quarter comparable sales, which includes January, to rise 12.7%. Its sales in the third quarter had risen 20.7%.
Shares of Target were marginally up in premarket trading. They have jumped about 60% over the last 12 months as the retailer has emerged as one of the pandemic winners.
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