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Target's earnings, sales grow in Q1
Target is seeing results from its early efforts to transform its image with shoppers and modernize its product selection.
Jenna Telesca
May 20, 2015
2 Min Read
Target Corp. is seeing results from its early efforts to transform its image with shoppers and modernize its product selection.
“Our buying teams are focused on delivering enhanced newness, quality and value to our guests, and we're communicating this renewed focus in both traditional and digital channels,” said CEO Brian Cornell in a call with analysts.
Target reported earnings of $635 million for the first quarter that ended May 2 — a 51.6% increase in profit compared to the same quarter last year. The quarter’s sales increased 2.8% to $17.1 billion, with strong sales in apparel, home and beauty. Digital sales were up 37.8%.
The Minneapolis-headquartered company attributed increased traffic and larger tickets to a higher than expected increase in comparable store sales to 2.3% for the quarter, with comparable sales in Target's signature categories — style, baby, kids and wellness — up more than twice as much.
Target chief merchandising officer Kathryn Tesija said that food comps were just below the company average.
“While this quarter's results are encouraging, we're focused on the work ahead of us as we transform ourselves to become a truly modern retailer and more relevant to our guests,” said Cornell.
Follow @SN_News for updates throughout the day.
As reported previously by SN, Target is adjusting its approach to grocery. Company officials said the retailer is testing ideas to improve product assortment and presentation with plans to roll out chainwide changes next year.
“We have an opportunity to drive more traffic and sales in this critical area of the store by becoming more specialized in our assortment, more focused on healthy options and support of wellness,” said Cornell.
Target’s Made to Matter collection of natural and organic products is on track to be a $1 billion dollar brand by the year’s end. The line, spanning grocery, cleaning, beauty, health and baby categories, has products from 30 suppliers.
Cornell said that 98% of Target shoppers buy organic and natural products.
The chain is also still testing its small urban format stores — CityTarget and Target Express. Target has increased its expanded food assortment store count by 35 since May 2014.
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