Target Corp. TGT reported on Wednesday that comparable sales climbed 17.2% in November and December as consumers still found ways to celebrate the holidays despite the ongoing pandemic.
The Minneapolis-based retailer noted that while digital sales remained robust with a 102% increase, it also recorded higher traffic in its stores and customers spent more money per purchase than they did last holiday season. The average ticket grew by 12.3% year over year and combined transactions in stores and online rose 4.3%. Comparable store sales increased 4.2%.
In a statement, Chairman and CEO Brian Cornell noted that the company, which has been a Covid-19 winner as a result of its delivery options, saw continued momentum as well as "notable market share gains" across its entire product portfolio.
"We're very pleased with our results, and the strength of our performance is a reflection of the tireless work of our team to support our guests through a safe, convenient and inspirational experience," he said. "Throughout the holidays, we delivered joy for holiday shoppers while focusing on safety—adjusting promotions to reduce crowding while delivering easy, contactless fulfillment options through Drive Up and Shipt."
Target said digital sales were largely driven by its contact-free, same-day delivery services, which included order pick up, curbside delivery and Shipt. Together, these services grew 193%. Drive Up saw the largest growth with a 500% increase, while orders fulfilled by Shipt grew more than 300%.
The retailer also attributed its strong performance to its modified holiday sales approach amid the pandemic. To thin out Black Friday crowds and help prevent spreading the virus, Target closed its stores on Thanksgiving day and started rolling out sales weeks in advance. It also moved more deals online.
As for what shoppers were buying the most of in order to find some seasonal cheer, Target reported that it saw low-20% growth in both the home goods and hardlines categories from last year, while comparable sales for food and beverages rose 17% and beauty and essentials posted gains in the low teens. Sales of apparel recorded a high single-digit increase.
Among Target's best-selling items were pajama sets, Christmas tree ornaments and Wondershop gingerbread house kits.
With a market cap of $99.15 billion, shares of Target were down 0.46% on Wednesday at $198.18. GuruFocus estimates the stock climbed nearly 40% in 2020.
Target's challenge now that Covid-19 vaccines are being administered across the country will be retaining its market share, which is something the retailer is gearing up for.
"We've seen continued strong sales trends in the new year, and as we turn to our 2021 plans, our team is focused on continuing to build on the guest engagement and significant market share we gained throughout 2020," Cornell said.
Target is expected to report its full fourth-quarter 2020 results in March.
Disclosure: No positions.
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