How Target is winning shoppers: Circle loyalty program, Good & Gather brand, deliveries and curbside pickup

Chicago Tribune Finance 2 weeks ago

Target is bursting into the critical holiday season with strong third-quarter earnings as the company pushes faster delivery and invests heavily in stores, on technology and on new brands.

The company raised its expectations for the year and shares rose more than 10% before the opening bell Wednesday to what will be an all-time high.

The Minneapolis retailer’s comparable sales, which also include online sales, rose 4.5%. That reflects 2.8% growth in stores open at least a year. Third quarter online sales rose 31%. Customer traffic to its stores and website rose 3.1%.

Target is demonstrating how an intense focus on both low prices and customer convenience can put traditional retailers on a competitive footing with Amazon.com, which has upended the retail sector. Walmart last week raised its annual profit expectations after reporting strong third-quarter results helped by its grocery business.

Other traditional rivals, particularly department stores and mall-based clothing chains, have been unable to keep pace and are suffering.

Still, the holiday season is expected to be brutally competitive. Faced with the shortest holiday shopping season since 2013, retailers are to get into the minds of potential customers early.

Target will spend $50 million more on its payroll this quarter than it did during the same period last year to ensure customers can find help whenever they need it.

The company is also introducing some new incentives this holiday season such as a new loyalty program called Target Circle. So far, it has signed up more than 35 million people. It found in an early test of the program that customers shopped more frequently and spent 2% to 5% more.

This past fall, it launched a new grocery store label brand called Good & Gather, which will be expanding to 2,000 products by late next year.

It’s also offering a variety of options to buy, from picking up online orders curbside or in the store. Through Shipt, which it purchased in December 2017, shoppers for a fee can get deliveries to their doorstep in a few hours because there is likely a Target store nearby. The company said Wednesday that same-day services accounted for 80% of its third quarter digital growth

“Target continues to operate in rarified air, with (third-quarter) results outstanding across the board,“ said Charlie O’Shea, lead retail analyst at Moody’s Investors Service.

Target appears to be in a good position to avoid price cuts and other promotions that can lower profit because inventory levels are down vastly from a year ago, O’Shea believes.

“With inventory levels down around $1 billion year-over-year, Target is well-positioned for holiday,” O’Shea said.

Third-quarter profit was $714 million, or $1.39 per share, including discontinued operations worth 2 cents. Earnings, adjusted to account for discontinued operations and non-recurring gains, came to $1.36 per share, easily beating Wall Street per-share expectations for $1.19.

Revenue was $18.67 billion, also topping projections.

Target Corp. now expected adjusted earnings per-share of $6.25 to $6.45 in 2019, compared with earlier projections of between $5.90 and $6.20.

Portions of this story were generated by Automated Insights using data from Zacks Investment Research.

Follow @ChiTribBusiness on Facebook and @ChiTribBiz on Twitter.

Tags: Business

Source link
Read also:
Concord Monitor › 1 month ago
Plymouth Jamie Capaul joins the Circle Program The Circle Program is pleased to announce that Jamie Capaul has joined the Circle Program on a year-round basis as the organization’s new program manager. Capaul knows the Circle Program well having been...
USA Today › Finance › 2 months ago
Target's loyalty program, Target Circle, has now rolled out nationwide. Shoppers earn 1% of purchases back and get other perks.
Chicago Tribune › 2 weeks ago
With no snow in the immediate forecast, the third and final round of Naperville’s curbside leaf pickup program is expected to be completed on schedule.
CBS Local › 1 month ago
LOS ANGELES (CBSLA) — Officials at the Los Angeles International Airport say a plan to temporarily halt curbside pickup by rideshares and taxis will alleviate congestion at the central terminal area, but representatives from Uber said the plan will...
USA Today › Traveling › 2 months ago
Here's how some major airports have worked to address issues of curbside congestion from Lyft and Uber rides.
USA Today › Finance › 2 months ago
Target is launching a new food brand, Good & Gather, starting Sept. 15. The brand will have more than 2,000 products including Avocado Toast salad.
USA Today › Finance › 2 months ago
Target Circle is now available at all stores nationwide and replaces Cartwheel with additional perks. Plus, why was Will Smith at Target?
Forbes › Lifestyle › 2 months ago
Los Angeles International (LAX) is banning curbside pick-up by rideshare giants Uber and Lyft in favor of a shuttle bus system.
USA Today › Finance › 2 weeks ago
Emily Golub says Target's Good & Gather line is too similar to her meal kit company Garnish & Gather that launched in 2013.
Los Angeles Times › Traveling › 2 months ago
At month’s end, LAX is banning terminal curbside pick-ups by ride shares and taxis. Here’s how to make the best of the walking and shuttle bus options.
Sign In

Sign in to follow sources and tags you love, and get personalized stories.

Continue with Google
OR