Business Job Targets rarely on Holiday Sales, Sliding Shares

Job Targets rarely on Holiday Sales, Sliding Shares


(Bloomberg) – Target Corp has succeeded in reducing the quarterly sales outlook after a holiday season which has lost its own expectations, delivering a warning signal to the entire retail sector that we are facing tougher times.

Comparable sales – a main retail performance barometer – increased by only 1.4% in the November-December period, significantly less than the 5.7% growth last year. The freelance retailer said the most significant growth was in toys and electronics, reflecting a greater proportion of the company's business during the holidays and lack of goods. A calendar change for less days between Thanksgiving and Christmas also added to the box.

“Some consumers decided to preserve their budgets for holidaymakers rather than splashing on the big ticket market,” said Neil Saunders, managing director at GlobalData Retail, in a note. “Moreover, the technology line in electronics has not always been encouraging this season – which is particularly the case for Target control – but which has affected sales anyway.” T

The shares exploded as much as 9.7% in pre-market trade on Wednesday.

The results come from the same results from department stores such as J.C. Penney Co. In 2019 its shares almost doubled as it had previously exceeded the analysts' estimates and doubled its full year guidance. The loss of holiday also raises doubts about two other athletes, Walmart Inc. t and Best Buy Co., which reports holiday results next month.

The period was a “severe loss”, according to Goal Chief Executive Brian Cornell. “Although we knew that this season was challenging, it was more challenging than we had hoped.” T

Flat Toys

Target made a great deal of toys over the holidays by opening more than two dozen mini-Disney shops within a number of their locations and sales made on the Toys website “R” Us. He didn't pay for it. A comparable toy sale was fair, with a positive sales break lasting about five years. Electronic sales decreased by more than 6%, he said, because the lack of new and exciting gadgets reduced consumer demand, while house decorations also declined.

“There was a significant weakness in electronics and parts of the town,” Cornell said in a blog post that accompanied the results. “After two strong holiday seasons in toys, our growth was basically flat.”

Saunders pointed out that Target had failed to achieve the “mark” by not starting some holiday promotions early enough, leaving opportunities for competitors. Target storage traffic decreased by approximately 1% over the November-December period compared to the previous year, according to data tracking.

Targets were also reflected in the holiday results issued on Tuesday by the NPD data tracking Group, which found that sales of the main categories of gifts between 3 November and December 28 increased by 0.2% compared to the same period last year. especially.

The broader trend of Walmart Injury, the nation's biggest retailer, which appeared to have had a holiday sale “softer” than expected, could have been said by analysts at Cleveland Research last week. . Walmart shares fell by 2.4% in pre-market trade, while Best Buy electronics retailers decreased by 4.9%.

Lower Outlook

Target now sees fourth quarter comparative sales in line with its holiday result of 1.4% growth. It outlines the average estimate of 3.8% for analysts compiled by Consensus Metrix. On the left, the company kept its profit forecast for the quarter, and said margins should benefit from the sale of more profitable items such as clothing, where Target has built market share from competitors. Clothing sales rose by about 5% over the holidays, he said, and items of beauty increased by 7%.

What says Bloomberg Intelligence:

“A goal may need to change a strategy to regain fiscal momentum in 2020, in our view, against competing landscapes and increasingly difficult comparisons in the same VS shop a year ago. It may be more difficult to achieve longer term sustainable growth in the context of a challenging retail landscape. ”

Jennifer Bartashus, retail analyst

Click here to read the research

The overall earnings target is to report a quarter quarter in early March.

Web sales increased by 19%, slower than the performance of the online unit last year and growth is below 20% in some time. The company has invested heavily in improving its logistics, providing a variety of channels from which customers can access ecommerce orders, from picking the path to the same day home delivery. But the poor results show that the problem remains for many retailers based on the shop.

He also named Mark Schindele as the chief shopkeeper, instead of Janna Potts, who is retiring. Schindele, who was a 20-year-old veteran of his age, recently launched as senior vice president of properties, where he was in charge of recasting projects and small Target formats.

(Updates to comment of the third analyst) t

To contact the reporter on this story: Matthew Boyle in New York at [email protected]

To contact the editors responsible for this story: Crayton Harrison at [email protected], Lisa Wolfson, Jonathan Roeder

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© 2020 Bloomberg L.P.


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