23 May

Target and Its Peers Continue to Boost Sales

WRITTEN BY Amit Singh

Traffic continues to boost sales

Target (TGT) posted better-than-expected sales for the first quarter of fiscal 2019. Improved sales across core merchandise categories and higher comps in both the stores and online platform supported the first-quarter sales beat. Comps rose 2.7% in stores. Meanwhile, digital sales contributed 2.1% to the overall comps growth rate.

Target reported total revenues of $17.6 billion, which increased 5.0% on a YoY basis and exceeded analysts’ expectation of $17.5 billion. Comps rose by 4.8%, led by a 4.3% increase in traffic and 0.5% growth in average ticket size.

Target and Its Peers Continue to Boost Sales

Notably, the expansion of fulfillment options, new and exclusive assortments, store remodeling, and competitive pricing continue to drive traffic, and in turn, its sales. Management stated that comps have now improved in the past eight quarters, driven primarily by robust growth in traffic across stores and the online platform.

Amid heightened competition, large retailers like Walmart (WMT), Target, and Costco (COST), continue to invest in price and the online platform to defend their market share and drive comps. Target, Walmart, and Costco successfully defended their market share and have reported stellar comps growth in the past several quarters despite the expansion of Amazon (AMZN), which is commendable.

Comps at Walmart’s US business have now improved in the past 19 quarters. Meanwhile, Costco continues to outpace both Target and Walmart with its comps growth rate.

Outlook

We expect Target’s comps growth rate to continue to be impressive. Higher traffic led by expanded digital offerings and store remodeling is expected to drive traffic, and in turn, sales. Management expects comps to mark low-to-mid-single-digit growth in both the second quarter as well as fiscal 2019.

Latest articles

Investors have been holding their breath for a Fed rate cut for a while now. But are they prepared in the event that that doesn't happen?

Innovative Industrial Properties (IIPR) continued to slump on July 22. The stock lost almost 6.8% of its value on the day.

22 Jul

Why AT&T Stock Is Down 2.2% Today

WRITTEN BY Ambrish Shah

AT&T stock (T) was trading at $32.14 with a 2.0% loss for the day. Earlier today, it posted a low of $32.08. Is the stock overvalued right now?

The Walt Disney Company’s (DIS) superhero film Avengers: Endgame has finally surpassed the record set by James Cameron’s Avatar.

22 Jul

Why Durect Corporation Is Soaring Today

WRITTEN BY Margaret Patrick

On July 22, Durect Corporation (DRRX) entered into a collaboration with HIV leader Gilead Sciences (GILD).

Pure Alpha, the flagship fund of Ray Dalio’s Bridgewater Associates, fell 4.9% in the first half, the Financial Times reported.