Target delivered another strong quarter during the pandemic, but even CEO Brian Cornell was caught off guard by what it saw after the holidays.
Store traffic and sales typically slow for retailers after the spree of spending and gift-giving in November and December. Instead, the retail chief said sales picked up at Target in the first few weeks of January.
“January was a really surprising month for me,” Brian Cornell said in an interview with CNBC’s “Squawk Box” on Tuesday. “I think if I do this for another 20 years, we’re unlikely to see January comps grow at a rate of over 30%.”
Cornell said shoppers flocked to stores to redeem gift cards and freshen up their homes, wardrobes and kitchen pantries. He said customers were “shopping for newness.”
“We saw a great response to anything new in our assortment, from home to apparel to beauty,” he said.
That lifted the big-box retailer’s fourth-quarter results, helping them to top Wall Street’s expectations.
He also credited the investments that Target had made and the trust it’s earned from customers during the global health crisis, as the retailer has focused on safety and offered contactless ways to shop like curbside pickup.
He did not mention another factor that likely played a role, too: Extra money in customers’ pockets. Retail sales grew by 5.3% in January as Americans got $600 stimulus checks, according to a government report.
Comparable sales, a key metric that tracks sales at stores open at least 13 months and online, rose 17.2% in November and December, as customers bought gifts and holiday decor. Thanks to January, though, the sales were boosted further — growing by 20.5% in the fourth quarter compared with a year earlier.
Target, however, declined to share an outlook for the year, saying it’s been difficult to gauge consumer behavior during the pandemic.
Target is holding an investor meeting Tuesday to share its plans to keep up the company’s performance in the year ahead, especially as Americans get Covid-19 vaccinations and can potentially spend their money on dining out or booking vacations again.
