Target Corporation (NYSE:TGT) has posted stronger results in Q3 2019 on improved sales of apparel, push into quick delivery, and larger investments for store revamps. While its peers, like Kohl’s, blamed the warm weather for the delay in apparel sales, Target is pushing ahead with better sales of apparel (up 10%). Its aggressive push into the quick delivery mechanism and higher investments into store renovations are paving the way for the giant to post stellar results and raise guidance for the full year.
Comparable sales increased by 4.5%
The comparable sales of the discount retailer have surged by 4.5% in Q3 2019, surpassing the Wall Street estimates. Target is attracting more customers to its local stores while improving sales online. Its shares trade at $127.65 (up 1.01%) on the closing day of November 21, 2019. The company expects to post better than expected profits in 2019 (for the second time).
Reinvents store brands
Target reinvented its store brands in the past few years. The company introduced innovative and widely accepted brands like the $2 billion Cat & Jack for children, the universal thread for women, and Good fellow& Co for men. J.C. Penny is struggling with brands and Kohl’s grapple with reinventing store labels such as Sonoma. Target is accomplishing the success of home goods also.
Neil Saunders, Managing Director (GlobalData Retail), said the success of Target is on the backdrop of putting together affordable and desirable products in all the departments. Target improves its digital firepower and stores with a multi-year investment of $7 billion. Its recent initiatives include remodeling of over 1,800 stores yearly and update them with a host of affordable and high-quality assortments to attract the customers. The company is also putting more thrust on e-commerce to drive growth.
Visual merchandisers are one of the sales boosters. Target has improved the stylish presentation of products that matches and mixes items to provide a whole new look. It provided training to the store workers to impart in-depth knowledge about what they sell. As a result, Target presented the products in a pleased manner and in a cozy environment along with trained staff to move forward in boosting sales.
Target expects to benefit from same-day delivery and a new loyalty program to attract more customers in the upcoming Christmas and Thanksgiving holiday seasons. The retailers generate almost 40% of their annual sales during the holiday season.