Sales and profitability exceeded expectations at Target Corp. in the recent quarter, driven by the retailer’s recent efforts to improve its stores and digital capabilities, plus a “very strong consumer environment,” said Brian C. Cornell, chairman and chief executive officer.
Net earnings in the second quarter ended Aug. 4 surged 19% to $799 million, equal to $1.50 per share on the common stock, from $671 million, or $1.22 per share, in the prior-year period. Total revenue climbed nearly 7% to $17,776 million from $16,634 million.
“Comparable sales grew 6.5% in the quarter, representing Target’s strongest quarterly comp performance since 2005,” Mr. Cornell said during an Aug. 22 earnings call with securities analysts. “This increase was driven by traffic growth of more than 6%, an unprecedented number and, by far, the strongest performance since we began reporting this metric in 2008.”
The company achieved same-store sales growth across its core merchandising categories, including food and beverage, executives said.
“In food and beverage, we delivered our sixth straight quarter of accelerating comps,” said Mark J. Tritton, executive vice-president and chief merchandising officer. “Growth continues to be led by adult beverage and produce, areas in which we have made important investments over the last couple of years.”
John T. Mulligan, executive vice-president and chief operating officer, described other changes to the grocery category that are helping to drive sales and traffic.
“...in food and beverage, we are changing how the team accomplishes everyday tasks, allowing more opportunities for guests to interact with experts on the sales floor while also standardizing operations to ensure we have fresh and full presentations, a focus on food safety and a strong and efficient foundation for how we operate,” Mr. Mulligan said. “While these investments are already helping us deliver stronger traffic and sales, we are also focused on driving efficiencies that can help us offset the costs. As a result, we have completely redesigned when and how our teams sort and stock product, reducing steps and creating more opportunity for guest interaction during key business hours.”