Target was right on in the second quarter, beating Wall Street estimates and continuing gains in the home department even if advances moderated after strong increases in the 2020 period when many competitors were closed due to the COVID-19 pandemic.
Target posted second-quarter net earnings of $1.82 billion, or $3.65 per diluted share, versus $1.69 billion, or $3.35 per diluted share, in the year-before period.
Adjusted for one-time events, earnings per diluted share were $3.64 versus $3.38 per diluted share in the 2020 quarter, Target stated.
Target beat a Yahoo Finance-published analyst average diluted earnings per share estimate of $3.49.
Second-quarter comparable sales gained 8.9%, on top of 24.3% in the COVID-19 struck period a year prior.
Comparable sales growth was driven completely by traffic with consumers returning to stores as the pandemic began to have a lesser effect on retail, Brian Cornell, Target’s chairman and CEO, said in a conference call. Store comparable sales grew 8.7%, on top of 10.9% growth in the 2020 quarter. Digital comparable sales advanced 10%, following on growth of 195% in last year’s period. Same-day services, including order pickup, drive up and Shipt, continued to lead digital sales, growing about 55% in the quarter year over year on top of 270% in the year-previous period. Target pointed out that more than 95% of its second-quarter sales were fulfilled by its stores.
All five core merchandise categories, including home, delivered positive comparable sales, on top of last year’s historic sales performance, Target asserted.
Total revenue, according to the company, was $25.16 billion versus $22.98 billion, in the 2020 quarter, as sales gained $24.83 billion from $22.7 billion. Operating income was $2.47 billion as compared to $2.3 billion in the year-earlier period.
In the second quarter, our business generated continued growth on top of record increases a year ago, reinforcing Target’s leadership position in retail. We’ve spent years building and investing in the durable model we have today, which is supported by a differentiated strategy and the best team in retail.
-Brian Cornell, CEO & Chairman, Target
Home and hardlines sales gained moderately over strong growth in the 2020 quarter, Cornell said in the conference call, while apparel had the greatest gains among merchandise categories
In announcing the financial results, Cornell said, “In the second quarter, our business generated continued growth on top of record increases a year ago, reinforcing Target’s leadership position in retail. We’ve spent years building and investing in the durable model we have today, which is supported by a differentiated strategy and the best team in retail. Even after unprecedented growth over the last two years, we see much more opportunity ahead of us, and we’re leaning into opportunities to invest in the long-term growth and resiliency of our business. Our team and operating model can seamlessly adapt to changes in the environment, and we’re well-positioned to deliver outstanding performance in the back half of the year.”