Target Reports Ecommerce Growth of 41% in Q2

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Target reported a 41% increase in ecommerce sales during the second quarter, with overall revenue increasing 7%. Online represented 5.6% or less than $1 billion of Target’s nearly $18 billion in Q2 sales. Comp sales were up 6.5% in the quarter, the strongest showing since 2005, driven by a 6% growth in store traffic.

Target saw an incremental lift from its one-day sale in July – which coincided with Amazon Prime Day – with strong traffic both online and in stores. Executives said it was the company’s biggest digital sales day outside of the holidays, with volume nearly three times that of Target’s forecast.

“We saw accelerating comp sales trends in all five of our core merchandising categories,” said Brian Cornell, CEO and chairman, during an earnings call.

While there were healthy increases across the board, Cornell said comp growth in Target’s home category was up nearly 10%. Hardlines also saw high-single-digit comp growth driven by strength in both toys and electronics.

Cornell said in the first half of 2018, Target delivered comparable sales of 4.8%.

“We continue to focus on unique opportunities in key toy and baby categories, given the recent closure of Toys R Us across the country,” said Cornell. “And, of course, as the year progresses we’ll continue to benefit from the broader rollout of new fulfillment capabilities like Drive-Up and Shipt, brand launches in multiple categories, the completion of existing remodels and the opening of more small-format stores.”

Mark Tritton, Target’s Executive Vice President and Chief Merchandising Officer, said customer scores for convenience in everyday pricing. He added that all five of Target’s core categories saw comp growth ahead of the overall figure of 3% in Q1.

“Among the three months May benefitted from the recovery of temperature-sensitive sales, and July benefited from back-to-school and back-to-college and some calendar shift,” Tritton said. “But comps in all three months were stronger than our first-quarter trend.”

Tritton said some of the strongest market share gains were around Mother’s Day, Father’s Day, Memorial Day and the Fourth of July.

Within the home category, Target saw strong sales in seasonal items, reflecting early results in back-to-school and back-to-college. In apparel, there was high-teens growth in the baby category.

Hardlines, food and beverage and essentials categories also delivered standout growth. Hardlines was driven by double-digit comps in both toys and electronics. Electronics saw strong growth in video games as well as accessories, with Target launching its new electronics accessories brand Heyday during the quarter.

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