By Siddharth Cavale
NEW YORK (Reuters) – Target raised its holiday-quarter comparable sales forecast on Thursday, buoyed by robust shopper demand for clothing, toys and beauty products during November and December. Black Friday and Cyber Monday were record sales days, the Minneapolis-based chain said in a statement, prompting it to raise its comparable sales growth forecast for the three months through January to 1.5% from prior expectations of flat growth.
Analysts surveyed by LSEG had expected fourth-quarter comparable sales to rise 0.2%. However, the retailer maintained its forecast for fourth-quarter and full-year adjusted earnings per share to be in the range of $1.85 to $2.45 and $8.30 to $8.90, respectively.
Target’s performance is in contrast to rival Macy’s, which issued a more downbeat outlook for the holiday quarter. It also surpassed initial estimates from data and research firms that had predicted a slightly weaker Black Friday and Cyber Monday for Target compared to rivals Walmart, PDD’s Temu and Shein.
Comparable sales rose 2% during November and December, Target said, driven by a nearly 3% rise in shopper visits to its website and 1,963 U.S. stores.
The retailer experienced a “meaningful acceleration” in purchases of non-essential items, particularly apparel and toys, during those months, which was a change from the previous quarter, where apparel sales were weak due to unusually warm weather across the U.S. which reduced spending on winter clothing. As a result of those trends, Target had issued a much weaker than expected holiday-quarter sales forecast, causing its shares to drop.
Since then the company boosted advertising on streaming platforms like Peacock and Hulu after Black Friday and on Cyber Monday. It also increased promotions to attract cash-strapped customers and cut prices across a wide assortment. Some of these promotions included up to 40% off sweatshirts, sweatpants, fleece and denim products and increasing its collection of toys priced under $20.
The company also benefited from its exclusive merchandise partnership with pop star Taylor Swift, a Target spokesperson said, with shoppers queueing up to buy her Eras Tour book and vinyl albums across stores on Black Friday. Besides that apparel was a category that did particularly well during November and December, he added.
Target on Thursday also announced several executive leadership changes, including the elevation of Adrienne Costanzo senior vice president, store operations, as its new chief stores officer and Prat Vemana’s transition to chief information officer and product officer from chief digital and product officer.
Costanzo and Vemana replace Mark Schindele and Brett Craig, respectively, who are retiring. The company also announced the promotion of Sarah Travis, currently the head of its retail media business, to executive vice president and chief digital and revenue officer.
(Reporting by Siddharth Cavale; Editing by Christopher Cushing)
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