MINNEAPOLIS, MN – While previous quarters brought along promises of improved performance in fresh foods, Target’s latest financial report indicates that perhaps the retailer’s efforts aren’t going to waste.
In a conference call with investors, Chairman and CEO Brian Cornell said that comparable sales in food grew faster than overall sales, validating the changes the company has been making to the assortment, presentation, and freshness. Although Cornell did not mention any specific numbers in regards to this particular metric, it is encouraging news.
Target has continued to make steady progress in revamping its food departments, and results from early tests have been positive. As we previously reported, the company announced that it would be expanding its fresh food tests to 25 Los Angeles area stores. These tests include assortment changes and more natural, organic local items under its “Wellness” category.
In after-hours trading, shares in Target were up 4 percent to $76.95.
Target reported that fourth quarter comparable sales in signature categories (Style, Baby, Kids, and Wellness) grew more than three times faster than the company average, according to a press release.
During the fourth quarter, comparable sales increased 1.9 percent, driven by traffic growth of 1.3 percent. Sales for the fourth quarter decreased 0.6 percent to $21.6 billion from $21.8 billion last year.
“With traffic growing for five consecutive quarters and our signature categories of Style, Baby, Kids, and Wellness leading our growth, Target’s results demonstrate that we are focused on the right strategic priorities,” said Cornell. “I want to thank our teams across the company for giving our guests a great holiday season, driving consistent growth throughout the fourth quarter and delivering on the sales and profit goals we laid out at the beginning of the year.”
Other highlights from the financial report include:
- Fourth quarter Adjusted EPS of $1.52 was in line with the company’s guidance of $1.48 to $1.58.
- For full-year 2015, Target’s comparable sales grew 2.1 percent, comparable traffic increased 1.3 percent, and Adjusted EPS increased 11.3 percent to $4.69.
- Target returned $4.8 billion to shareholders in 2015 through dividends and share repurchases.
“While we have made a great deal of progress in 2015, we are excited about the opportunity in front of us to provide a more seamless experience and accelerate profitable growth,” Cornell concluded.
Will we see Target continue to expand its fresh food tests to more locations? Stay tuned for more.
