Target: We’re bigger, stronger now
Private label brands across the company’s assortment accounted for nearly 30% of sales last year.
Minneapolis – With 19 consecutive quarters of comp growth under its belt, Target is projecting more of the same this year.
During the discount chain’s recently completed fiscal year, the company generated double-digit comp store gains in all five of its core categories: home, hardlines, apparel, food & beverage and essentials & beauty. Total comp rose 12.7% on top of a historic 19.3% gain last year and included 11.0% growth in same-store sales and a 21.0% jump in online comp.
“We are a bigger, stronger company now. We’re building on a bigger base,” CEO Brian Cornell told analysts at the company’s investor conference in New York this morning.
This year, Target expects low- to mid-single digit revenue growth and an operating margin rate of 8% or higher,
Other takeaways from the Q4 and fiscal year report:
Private label brands: Sales from owned brands climbed 18% to more than $30 billion last year, accounting for 29% of total sales.
Store growth: Target remains committed to physical retail stores, which also serve as hubs for online order fulfillment. The company plans to open roughly 30 new stores this year and each year in the foreseeable future. Store remodels have now touched 50% of the store fleet and will roll out to an additional 200 units this year. Remodeled stores generate an average 2% to 4% lift in sales in year one and 1% to 2% higher sales in the second year.
Marketplace strategy: The Target+ marketplace grew 75% in 2021. In contrast to marketplace formats operated by competitors, Target’s third-party sellers are added by invitation only – and the company plans to keep to that way so as not to overwhelm shoppers with too many choices.
Store traffic was robust during the fourth quarter ended Jan. 29, with comp traffic up 8.1% on top of a 6.5% gain in the prior year Q4. Total revenue increased 9.4%, with sales growth of 9.4% and 11.1% growth in other revenue. Net earnings rose 11.9% to $1.5 billion, or $3.21 per diluted share.
For the full fiscal year, sales climbed 13.2% to $104.6 billion. Comp traffic increased 12.3% on top of a 3.7% increase in the previous year. Net earnings jumped 59.0% to $6.9 billion, or $14.10 per diluted share.