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With Stupendous Online Sale And Same-Delivery, Target Easily Beat Sales Expectations

With Stupendous Online Sale And Same-Delivery, Target Easily Beat Sales Expectations
The American retailer Target Corp’s quick delivery services attracted a large number of customers who purchased everything from electronics to home goods during the Cvoid-19 pandemic which helped the company to easily surge past the expectations of analysts for same-store sales for the latest completed quarter, the company announced. 
In the third quarter, there was a 155 per cent growth in comparable digital sales for the retailer, Target said primarily because of its same-day services such as Drive up, Shipt or straight in-store pick-ups. More than 95 per cent of the sales of the company during the quarter were fulfilled through its stores.
The disruption caused by the health crisis has seem Target emerging as one of the big winners with the company’s investments made in private label and in its online business, including faster shipments, started to pay off during the pandemic.
"Those investments turned out to be crucial. Without them, we would not have been able to meet the extraordinary demand driven by the pandemic," Chief Executive Officer Brian Cornell said on a media call.
Interestingly, even with people making fewer trips outdoors during the pandemic, a growth during the quarter was also noted in store traffic at Target which is in contradiction to what was experienced by the bigger rival Walmart.
In the third quarter ended October 31, the company registered a 20.7 per cent growth in comparable sales, which include online and store sales, which was much higher than the expectations of analysts at 11.31 per cent growth, according to IBES data from Refinitiv.
There was a spike of more than 50 per cent in the sale of electronics products during the quarter while there was a growth in the mid-20 per cent range in comparable sales for the home category.
Retailers have also been forced to bring forward their holiday promotions because of the pandemic hit which has cast a doubt over the potential for the traditional holiday shopping season which starts at Thanksgiving and ends on Christmas day.
"Many have started to shop earlier and we do expect it (shopping) to be spread out during the holiday season, but they are looking to celebrate and ... we expect a lot of gift giving," Cornell said.
Compared to $714 million a year earlier, the net earnings of Target rose to $1.01 billion. On an adjusted basis, the company earned $2.79 per share.
The company also reported a 21.3 per cent rise in total revenue at $22.63 billion which easily beats estimates of analysts of $20.93 billion.

Christopher J. Mitchell

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