Target Corp. announced that comparable sales during the combined November/December holiday period decreased 1.3%.
As has been the case across retail, early season sales were soft. For the two-month holiday period, the company stated that comparable sales in Target stores declined more than 3% partially offset by digital sales growth of more than 30%. Transactions came in flat year over year, as a 1.7% decline in comparable store transactions offset a 30% gain in digital transactions. Comparable sales in signature categories grew by almost three percentage points faster than the company average. Comparable sales for the electronics and entertainment department declined in the high single digit range. Comparable sales in food and essentials, where Target has been shifting from a low-cost gourmet to a wellness orientation, both declined in the low single-digit range.
In the November/December period, total sales decreased 4.9%, a figure that reflects the impact of the December 2015 sale of Target’s pharmacy and clinic businesses, the company pointed out.
“While we were pleased with Black Friday sales, December digital sales growth of more than 40% and continued strength in our signature categories, these results were offset by early season sales softness and disappointing traffic and sales trends in our stores,” said Brian Cornell, chairman and CEO of Target. “While we significantly outpaced the industry’s digital performance, the costs associated with the accelerated mix shift between our stores and digital channels, and a highly promotional competitive environment had a negative impact on our fourth quarter margins and earnings per share. Despite these challenges, we are positioned to deliver full-year adjusted earnings per share of $5 or more in 2016, which would mark an all-time high for Target. And, importantly, our team has made substantial progress in positioning Target for long-term success by improving the shopping experience both in stores and on Target.com, transforming our supply chain and technology to support every way our guests want to shop, and developing new store formats that allow us to reach new guests in dense urban and suburban markets.”
Target stated that it now expects fourth quarter comparable sales in the range of negative 1.5% to negative 1%, compared with prior guidance of negative 1% to positive 1%. In fourth quarter 2016, Target expects both GAAP earnings per share from continuing operations and adjusted earnings per share of $1.45 to $1.55 compared with prior guidance of $1.55 to $1.75.
