Minneapolis – Target Corporation saw continuing improvement in discretionary business during the first quarter, especially in apparel.
Home and hardlines, however, remained soft. During Q1, Target reduced prices in select home categories, which drove up unit sales. Consumers, while resilient, remain stretched, according to Christina Hennington, EVP and chief growth officer.
“Beyond the psychological toll of the current environment, currently 1 in 3 Americans has maxed out or is reaching the limit on their credit cards,” she told investors during this morning’s quarterly call.
For the overall Target business, the first quarter financial performance was in line with guidance on both the top and bottom line. And the company expects to return to top-line growth during Q2.
Net sales for the quarter ended May 4 fell 3.2% to $24.1 billion. Total company comp declined 3.7%, coming in on the higher side of Target’s guidance.
Store comp fell 4.8%. Digital comp rose 1.4% – the first increase for digital in more than a year. The lift was driven by same-day services.
Target’s earnings under-performed Wall Street’s expectations. Net income slipped 0.8% to $942 million, or $2.03 per diluted share.
In a plus for the quarter, the relaunch of the Target Circle reward program added more than 1 million new members. The Target Roundel media business is growing rapidly. And the company experienced sequential growth in traffic, chair and CEO Brian Cornell noted.
“We’re focused on delivering newness to our guests and leaning into seasonal moments,” he told investors this morning. “I am happy to report we are firmly on track.”
See also:
- Target’s home sales still contracting. Will 2024 turn the tide?
- It’s “grow time”: Target plans hundreds of store openings, another $50 billion in sales