Target Corp beat estimates for quarterly same-store sales on Wednesday as a strong vaccination drive across the country encouraged shoppers to return to the stores and spend their stimulus checks on home goods, clothes and other items.
One of the big beneficiaries of a pandemic-led shopping spree, Target has seen its winning streak spill over into 2021 as the reopening of the economy boosts traffic at its stores, while its e-commerce business continues to draw online shoppers.
Comparable sales at stores rose 18% in the first quarter due to a rise in outlet traffic, while digital sales rose 50%, driven largely by same-day delivery services such as Drive up, Shipt and in-store pick ups.
"There is much greater optimism as consumers see the economy improve, as they get vaccinated, as they see COVID counts begin to decline" Chief Executive Officer Brian Cornell said on a media call, adding he expects, both, increased traffic at Target stores and more people shopping on its website.
Overall comparable sales, including online, rose 22.9% in the three months ended May 1, beating analysts' average expectations of a 9.93% increase, according to IBES data from Refinitiv.
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Apparel sales jumped about 60%, while comparable sales for food, beverages and essentials grew in low-to-mid-single digits, topping bumper sales from a year earlier when toilet paper and packaged foods flew off the shelves due to panic shopping.
The company also forecast positive single-digit comparable sales growth for the last two quarters of the year, while analysts were expecting a decline.
Larger rival Walmart Inc on Tuesday raised its full-year forecast after bumper first-quarter results as it also benefited from stimulus checks.
Target's total revenue rose 23% to $23.88 billion, beating estimates of $21.81 billion. Net earnings surged to $2.10 billion. Excluding items, it earned $3.69 per share.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Anil D'Silva)