Target Crushed Walmart During the Holiday Shopping Season
Target (TGT) seems to have escaped the holiday season doldrums that pinched archival Walmart (WMT).
The discount retailer reported on Wednesday that comparable sales rose 1.9% during the holiday quarter, easily outdoing Walmart’s 0.6% clip in the U.S. Perhaps more importantly, Target’s e-commerce growth picked up again, rising 34% last quarter after slowing down in the two preceding periods. Meanwhile at Walmart, growth slowed to 8%, raising questions about how well it is fighting back at Amazon (AMZN).
Target’s efforts to get more people to come to its stores—notably with services like in-store pick up of online orders—helped the number of shopper visits rise 1.3%.
Since CEO Brian Cornell took the reins in 2014, Target has focused on leading in a few key categories—baby, kids, wellness, and fashion—to stand out from the crowd. That strategy appears to be paying off. Target recently announced a new line of kids furniture and an overhaul to the presentation of one of its billion-dollar brands, Market Pantry, which are just two of the big changes coming next.
“With traffic growing for five consecutive quarters, and our signature categories of style, baby, kids and wellness, leading our growth, Target’s results demonstrate that we are focused on the right strategic priorities,” Cornell said in a written statement. Comparable sales in those categories rose nearly 6%, or three times faster.
Target expects an adjusted profit per share of $5.20 to $5.40 this year, above the $5.16 analysts projected. That would be above 2015 results, while Walmart forecast a drop in profit for 2016.