- Month-to-date overall comparable sales in March rose more than 20% due to panic shopping, while sales in February jumped 3.8%
- The company is experiencing “an unprecedented surge in traffic and sales”, says CEO
- Target reports the increase in costs of more than $300 million, stock price trades nearly 8% lower
Target (NYSE:TGT) has reported “unusually strong traffic and sales” despite the stay-at-home advice from the Government. The retailer also joined a long list of companies that were forced to withdraw its 2020 guidance due to the coronavirus outbreak.
“We are prioritizing the work that’s in front of us to support our team, store operations and supply chain as families across the country rely on Target for everything they need in this challenging environment,” said Brian Cornell, chairman and CEO, Target.
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Cornell said that the first three weeks in February were in line with the company’s expectations, however near the month’s end the surge in traffic and comparable sales across its multi-category portfolio was observed. Comparable sales for February rose 3.8% compared to a year ago.
“Over the past few weeks we’ve experienced an unprecedented surge in traffic and sales, as guests rely on our stores and same-day services. Ensuring we can take care of our team and deliver for the millions of guests who are counting on us remains our top priority,” Cornell added.
Due to the surge in demand, Target has increased hourly pay by $2 for its store and distribution center hourly full-time and part-time team members.
The uptick in demand has increased even further in March, especially in the “Essentials” and “Food & Beverage” categories. As a result, Target’s month-to-date overall comparable sales in March rose more than 20% compared to the same period a year ago.
“During these unprecedented times, the benefits of our strong balance sheet and diverse, multi-category assortment are particularly important,” said Michael Fiddelke, executive vice president and chief financial officer.
Target also reported increased costs due to “investments in pay and benefits, the spike in merchandise volume in stores and the supply chain, and the impact of additional hours dedicated to more rigorous cleaning routines in stores and distribution centers across the country”. These expenses are expected to cost the company more than $300 million.
Shares of Target are trading nearly 8% lower today in New York.