Online sales were a bright spot for Target in the first quarter

Target Corp. reported that both revenue and comparable sales declined in the first quarter of fiscal 2024 ended May 4. However, online sales increased slightly. Decreases in discretionary categories were partially offset by continued growth in the beauty category.

The results were as expected, the seller said.

“Our financial results improved for the third consecutive quarter, and the growth of our digital business was driven by a strong position in our same-day order fulfillment services,” CEO Brian Cornell said in a May 22 written statement.

“Consumers continue to respond to the newness and value we offer in their shopping experience, and we are pleased with the early results of the Target Circle relaunch. Looking ahead, our team will continue to provide our guests with lower prices, seasonally appropriate selections, ease and convenience as we continue to invest in our strategy and efficiency initiatives to return to growth and achieve our long-term financial goals,” he added. uninterrupted.

The target is No. 5 in 1000 best. The database is Digital Commerce 360’s ranking of North American online retailers in terms of online sales. Digital Commerce 360 ​​classifies Target as: mass merchant.

How much did Target make from online sales in the first quarter?

First-quarter total revenue targets fell 3.1% to $24.5 billion. Comparable sales decreased 3.7% due to a 4.8% decrease in comparable same-store sales and a 1.4% increase in digital sales.

The retailer said the first quarter was the first increase in e-commerce in more than a year. Online sales are up again thanks to same-day services such as in-store pickup, curbside and shipping, Target says. Drive Up saw the largest growth, growing 13% year-over-year, accounting for more than $2 billion in the first quarter. Target said 18.3% of Target’s first-quarter sales occurred online, compared with 17.5% in the same period a year ago.

Target circle week the April sales promotion was a success, Cornell said. This drove the highest web and app traffic of the past year, excluding the holiday season in the fourth quarter.

Online sales will likely continue to be a source of growth for Target, Cornell said. “In fact, we see digital technology as more than just a sales channel,” he added. “It is also the connective tissue found in most of our transactions. About half of guests who open the Target app on a given day will shop with us in-store that same day.”

Target said operating income fell due to lower sales. It fell 2.4% to $1.3 billion.

Discretionary spending remained a challenge in the first quarter

The retailer said Target’s first-quarter results remained under pressure in discretionary items. However, trends have improved compared to previous quarters. Target reported that apparel sales increased 4% compared to the fourth quarter of 2023. Meanwhile, stationary and home goods continue to have the greatest impact.

In response, Target is trying to appeal to consumers by cutting prices on 5,000 household and grocery items, it announced a few days before it released its first-quarter earnings. The retailer has already reduced prices on 1,500 products, with the rest expected to apply in the coming months. Target said the price changes would apply to everyday items that consumers frequently buy.

“These cuts focus on our everyday food and essential categories and are intended to help our guests make the most of their budgets,” Cornell said.

Target Circle relaunch

Target also relaunched its free Target Circle membership program in April. A new paid tier has been added: Target Circle 360.

Cornell said the free version of the program has more than 100 million members. One million of them joined in the first quarter.

Paid membership offers unlimited same-day delivery on orders of $35 or more. Delivery can take as little as an hour, Target said. Circle 360 ​​membership also includes same-day delivery from other retailers through Target’s fulfillment service. Shipt partners with dozens of retailers such as Big Lots (No. 237 on the Top 1000 list), Carter’s (No. 81) and Kroger (Number 6).

Members will also receive free two-day shipping on Target.com orders.

The red Target Card has been renamed the Target Circle Card with a 5% discount on purchases.

Circle members can link accounts to other services to get exclusive benefits, Target said. Target customers can earn Ulta Reward points on Ulta Beauty purchases at Target. Members also have access to free trials of Apple TV, Apple Fitness+ and other Apple services.

So far, the new Target Circle has been very popular with customers. “Our guests tell us they find the program easier to use, appreciate the transparency of the promotions offered, and understand the value their membership provides,” Chief Development Officer Christina Hennington said in a May 22 telephone interview.

“Public sentiment is up year-over-year, with mentions of Target Circle on social platforms up more than 500% year-over-year, driven by our wildly popular marketing campaign that featured Saturday Night Live contestant Kristen Wiig returns to her role as Mrs. Target,” she added.

Target earnings

For the fiscal first quarter ended May 4, 2024, Target Corp. he gave:

• Total revenue fell 3.1% to $24.53 billion from $25.32 billion in the year-ago period.
• Total comparable sales decreased 3.7% and comparable digital sales increased 1.4%.
• Targeted online sales accounted for 18.3% of total sales.

Read the latest quarter’s earnings target results here.

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