Target Corp. TGT -1.39% reported robust quarterly sales and a jump in store visits, a sign the retailer continues to grab market share even as consumer buying habits change during the pandemic.
Comparable sales, those from stores and digital channels operating for at least 12 months, rose 23% in the quarter ended May 1 compared with the same period last year. The sales growth rate was twice as high as the same quarter last year when people rushed to buy food and household staples early in the pandemic.
Larger rival Walmart Inc. reported comparable sales rose 6% in its latest quarter, a slightly slower growth rate than the same period last year. Walmart executives said sales benefited from government stimulus checks and pent up consumer demand.
Target booked gains across categories, but its results revealed signs of new buying behavior as more people ventured out or hosted social events. Apparel sales rose more than 60%, Target said, and sales of home goods and hardlines, such as appliances, rose more than 30%. Sales of food and home essentials, big winners last year, increased a few percentage points.
Overall sales through digital channels increased 50% in the most recent quarter, a slowdown from the same period last year when sales grew 141%. Store visits rose 17%, year over year.
Chief Executive Brian Cornell said shoppers continue to be drawn in by Target’s homegrown store brands and the ability to order products online for easy parking-lot pickup. Consumers are spending on items that show they are spending more time out and about, he said on a call with reporters.
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Results from other retailers earlier this week, including Walmart, Home Depot Inc. and Macy’s Inc., show that shoppers are returning to physical stores and are ready to spend. But some retailers are absorbing more market share than others. Macy’s reported a jump in quarterly sales and swung back to a profit from the year-ago period when many of its stores were temporarily closed. Meanwhile, Home Depot’s most recent quarterly comparable sales rose 31%.
At Target, quarterly earnings were $2.1 billion, compared with $284 million a year ago, lifted by strong sales of higher margin items such as apparel and store brands. Total revenue rose 23% to $24.2 billion.
For the second quarter of 2021, Target expects comparable-sales growth in the mid-to-high single digits.
Worker shortages affecting many retailers and restaurants aren’t being felt at Target, Mr. Cornell said, because of wage investments and other worker benefits. Target raised pay for hourly workers to at least $15 an hour last year.
Write to Sarah Nassauer at [email protected]
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