MINNEAPOLIS - January 10, 2019
Target Also Announces Leadership Changes
- Comparable sales grew 5.7 percent in the November/December period. Given last year’s increase of 3.4 percent over that same period, comparable sales have grown more than 9 percent over the last two years.
- November/December comparable sales growth was driven primarily by traffic, combined with a small increase in average ticket.
- Store Pickup plus Drive Up grew more than 60 percent from a year ago, and accounted for a quarter of the Company’s digital sales in those two months.
- Comparable digital sales growth of 29 percent in November/December was driven entirely by growth in store-fulfilled digital sales.
- For full year 2018, Target is on track to grow digital sales more than 25 percent for the fifth consecutive year.
- All five of the Company’s core merchandise categories saw comparable sales growth in the November/December period. Growth was strongest in Toys, Baby and Seasonal Gift items.
- The Company continues to expect fourth quarter comparable sales growth of approximately 5 percent, full-year Adjusted EPS of $5.30 to $5.50 and GAAP EPS of $5.41 to $5.61.
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Target Corporation (NYSE: TGT) today announced that its comparable sales in the combined November/December period grew 5.7 percent, on top of 3.4 percent growth in the same period last year. Results reflected strong traffic, positive store comps and comparable digital sales growth of 29 percent. Target expects that 2018 will be the fifth consecutive year in which its digital sales grow more than 25 percent.
Brian Cornell, Chairman and Chief Executive Officer of Target Corporation, said, “We are very pleased with Target’s holiday season performance, which came on top of really strong results in the same period last year. This performance demonstrates the benefit of placing our stores at the center of every way we serve our guests, including both in-store shopping and digital fulfillment.
Given our fourth quarter outlook, we are on track to deliver Target’s strongest full-year comparable sales growth since 2005, market-share gains across all of our core merchandising categories, and double digit growth in Adjusted EPS. In 2019, we expect to build on this momentum as we gain further scale in our fulfillment capabilities and deliver profitable growth throughout the year.”
Fourth Quarter and Full-Year 2018 Guidance
Target continues to expect fourth quarter 2018 comparable sales growth of approximately 5 percent. For the full year, the Company continues to expect Adjusted EPS of $5.30 to $5.50 and GAAP EPS of $5.41 to $5.61. The 11-cent difference between expected full-year Adjusted EPS and GAAP EPS is driven by discrete items already reported through third quarter 2018.
Target Corporation today also announced that Chief Financial Officer Cathy Smith will be retiring from the Company. Smith will continue in her role as Chief Financial Officer until her successor is named, and then move to an advisory role until May 2020 to ensure a smooth transition. Target is conducting a comprehensive internal and external search for its next CFO and a search firm has been retained to assist in the process.
“On behalf of our Board of Directors and Target’s entire team, I want to thank Cathy for her leadership and valuable contributions since joining the Company in 2015. Cathy’s deep expertise and leadership helped usher in strategic change for Target and positioned us for sustainable, long-term growth,” said Cornell. “I appreciate the role Cathy will continue to play as we identify a successor and manage a seamless transition.”
“I’m proud of the team’s accomplishments and all the progress we’ve made. I am excited about what is in store for Target and myself as I plan for retirement, including freeing up more time for my family,” said Smith. “As we look ahead to 2019, Target is in a position of strength and poised to continue building on its momentum.”
In addition, Target is announcing a series of changes to its Leadership Team to accelerate progress and drive efficiencies. All changes are effective immediately.
- Stephanie Lundquist, who has served as Target’s Chief HR Officer since 2016, has been named President of Food and Beverage. In a new role for the Company, Lundquist will oversee the full spectrum of all merchandising and operations for Food and Beverage, including strategy development and implementation. She and the newly integrated team will focus on accelerating progress, strengthening cross-functional alignment and driving operational excellence throughout the enterprise. Lundquist joined Target in 2005 and brings enterprise leadership and operations experience to her role. She will remain a direct report to CEO Brian Cornell and a member of the Company’s Leadership Team.
- Melissa Kremer, Senior Vice President HR, has been promoted to Target’s Chief HR Officer, taking on leadership of the enterprise-wide human resources strategy for Target’s 350,000 team members globally. Kremer, who has been with the Company since 2004, has led HR strategy and operations; HR business partnership, including support of Target’s largest commercial businesses; and the talent management functions of recruiting, learning, leadership development and strategic workforce planning. Kremer will join Target’s Leadership Team and report to CEO Brian Cornell.
- Katie Boylan, Senior Vice President, Communications, has been named Chief Communications Officer, with oversight of internal communication, corporate and brand communication, public affairs and crisis and issues management. She will report to the CEO. Boylan, who joined Target in 2011, brings 20 years of experience to her role, including work with multiple national consumer brands.
- Mike McNamara, Target’s Chief Information Officer, will now lead the Enterprise Data Analytics and Business Intelligence team, in addition to his leadership of Target’s Technology Services. Under McNamara’s leadership, the team will continue to provide data-driven counsel and expertise to enterprise business partners. McNamara joined Target in 2015 after serving in various roles with European-based retailer Tesco and has transformed Target’s approach to its information technology strategy, team and operating systems.
- Chief Marketing Officer, Rick Gomez, has been named Chief Marketing and Digital Officer and will now lead Target’s Digital team, focusing on its important role in personalization, loyalty and the overall shopping experience. Gomez joined Target in 2013 and was named CMO in 2017, with a focus on strengthening Target’s brand positioning and driving the business. Prior to Target, Gomez held various positions at MillerCoors, PepsiCo and the Quaker Oats Company.
Statements in this release regarding fourth quarter comparable sales guidance, full-year 2018 earnings per share guidance and expectations of profitable growth in 2019 are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the Company’s actual results to differ materially. The most important risks and uncertainties are described in Item 1A of the Company’s Form 10-K for the fiscal year ended Feb. 3, 2018. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement.
About TargetMinneapolis-based Target Corporation (NYSE: TGT) serves guests at more than 1,800 stores and at Target.com. Since 1946, Target has given 5 percent of its profit to communities, which today equals millions of dollars a week. For the latest store count or more information, visit Target.com/Pressroom. For a behind-the-scenes look at Target, visit Target.com/abullseyeview or follow @TargetNews on Twitter.