Target reports holiday sales in early Q4 2024

goal It raised its fourth-quarter sales forecast on Thursday after more consumers turned to its stores and website for holiday shopping — especially on days known for deep discounts.

The big-box retailer now expects comparable sales in the fiscal fourth quarter to grow about 1.5%. This is better than its latest forecast for the metric Almost flat. Comparable sales include sales on Target's website and stores open for at least 13 months.

However, the Minneapolis-based discounter did not raise its earnings forecast — an indication that the deals have incentivized shoppers. Target expects fourth-quarter earnings per share to range from $1.85 to $2.45, and full-year earnings per share to range between $8.30 and $8.90. Target will report full fourth-quarter earnings results on March 4.

goal Reduced its earnings guidance in early November after it posted its biggest profit loss in two years and blamed some of its problems on weak discretionary merchandise sales and the costs of preparing for a short-term phase. harbor Strike in October.

Target's report is the latest glimpse into a crucial season for the industry. Data so far indicate that it has gone better than expected, but investors have not been impressed. Lululemon, Abercrombie & Fitch and American eagleFor example, They all raised their forecasts for the fourth quarter on Monday, but shares of some of those companies traded lower that day.

Nordstrom Friday It boosted full-year sales forecastsBut only after a discreet advance look. And a competing store Messi It said on Monday that its sales would be at or just below its minimum price The previously announced range is between $7.8 billion and $8.0 billion.

The industry's main trade group, the National Retail Federation, is expected to announce its holiday sales summary on Thursday.

Discounts and sales events remained a A big driver of sales, as consumers emerge from a period of high inflation that has lasted more than two years. It's unclear how much these deals will cut into the profit margins of Target and other retailers, and whether sales will continue to improve if the promotions fade.

In November and December combined, total sales rose 2.8% and comparable sales rose 2% year over year, Target said. Digital sales grew nearly 9% compared to the holiday period a year ago.

Some areas of Target's growth contributed to holiday sales. that it Subscription serviceTarget Circle 360 ​​contributed to a more than 30% year-over-year increase in same-day deliveries in November and December. Sales through the company's third-party marketplace, Target Plus, have grown nearly 50% in that time.

The company said guest traffic increased about 3% during the two months of the holiday compared to the same period last year with increased online and in-person visits. December marks the eighth consecutive month of year-over-year traffic gains, Target said.

Target has taken aggressive steps to attract selective shoppers. In May, she said she would do so Price cuts on about 5,000 frequently purchased itemsIncluding diapers, bread and milk. It then announced another wave of price cuts in October on more than 2,000 holiday products, including cold medicine, toys and ice cream. That will amount to more than 10,000 items with price cuts this year by the end of the holiday season, the company said.

In a press release on Thursday, Target said Black Friday and Cyber ​​Monday saw record high sales. Discretionary categories, especially apparel and toys, saw a “significant acceleration in sales” compared to the fiscal third quarter, the company said. These categories tend to have a higher profit margin than basics like milk and paper towels, but they often go on sale during the holiday season.

In his remarks at the NRF's annual “Big Show” conference on Monday, Rick Gomez, Target's chief operating officer, said the company has seen a sharp jump in sales. On promotional days like Circle Week, an event held in early October that coincided with Amazon Prime Day.

“It was one of our biggest circuit weeks “We've seen it before,” he said. “But sales before the week and sales after the week were lower. There was a decline in sales. The consumer was very intentional.”

He said American consumers are “working on a budget,” but are still willing to spend on special moments like vacations or on a “must-have item.” For example, the retailer sold nearly 1 million copies of Taylor Swift's hardcover book about the Tour for the Ages.

On Thursday, Target also announced several changes to its leadership team that will take effect in early February. Mark Shindell, chief store officer, will retire after 25 years at Target and will be replaced by Adrienne Costanzo, who currently serves as senior vice president of store operations.

Brett Craig, chief information officer, will retire after 15 years with Target, and will be replaced by Prat Vimana, the company's chief digital officer and chief product officer. Sarah Travis will become the company's chief digital and revenue officer, a new leadership role, after serving as senior vice president of Roundel, Target's advertising and social commerce businesses.

Target recently got a new CFO: Jim Lee, former PepsiCo deputy chief financial officer, who took over the position in late September. He succeeds Michael Fidelke, who is now Target's chief operating officer.

Target is also on track to change leadership at the top of the company. In the fall of 2022, Target's longtime CEO, Brian Cornell, will take over. He agreed to stay on for another three years In a move that required the company's board of directors to cancel the retirement age. The target has not yet announced the expiration date of his contract and who his successor will be.