Image source: Target Corp earnings infographic, March 2, 2021
March 2 (Reuters) – Target Corp beat analysts’ estimates for holiday quarter sales on Tuesday, powered by the company’s same-day delivery and store pick-up services that helped fulfill resilient demand for home goods, toys and groceries during the pandemic.
Over the past year, Target and Walmart Inc consistently performed better than Wall Street expected as the deep-pocketed national retail chains amped up their online businesses during the health crisis and swiped market share from smaller rivals who rely more on their physical stores.
Still, Target held back on providing sales and earnings forecast for fiscal 2021, citing continued uncertainty over consumer shopping patterns amid the health crisis.
The company’s comparable sales rose 20.5% in the fourth quarter, comfortably beating analysts’ estimates for a 16.4% rise, according to IBES data from Refinitiv. Sales through its same-day deliveries and store pick-up services surged 212%, as consumers sought quicker ways to get their online purchases.
Analysts have, however, warned that the torrid pace of growth would be difficult to repeat in the coming months, as COVID-19 vaccine rollouts raise the promise of a return to something closer to pre-pandemic life.
Target’s comparable sales for the full year are expected to slip 3.6%, according to Wall Street brokerages. In February, Walmart said it expects sales and profit growth to slow this year, leading to a fall in its shares.
Total fourth-quarter revenue for Target rose 21.1% to $28.34 billion, beating the average estimate of $27.48 billion. Full-year sales rose by over $15 billion, larger than the combined growth of the last 11 years.
Net earnings surged 65.6% to $1.38 billion. On an adjusted basis, the company earned $2.67 per share.
Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila.