- Target's same-store sales fell 3.7% last quarter, marking the fourth consecutive quarter of declines.
- Improvements in e-commerce were not enough to make up for a 4.8% decline in store same-store sales.
- The company is taking various measures to avoid a fifth consecutive quarter of negative results.
Target reported sales of $24.5 billion last quarter, with same-store sales down 3.7%, its fourth consecutive quarter of declines. E-commerce orders turned to growth, increasing 1.4%, but that wasn't enough to make up for a 4.8% decline in brick-and-mortar same-store sales.
Unlike total sales, same-store sales don't include new or closed stores, and analysts typically use the metric to gauge a company's underlying health. For Target, the metric only reflects results from stores that have been open for at least 13 months.
While the company managed to improve profitability last quarter, CEO Brian Cornell told investors on Wednesday that “we won't be satisfied until we see positive comparative results for the second quarter and the rest of the year.”
Target is now taking a number of steps to help bring about this turnaround, the latest being price cuts on thousands of products that Cornell said will collectively save consumers millions of dollars this summer.
The company also revamped and expanded its Target Circle membership program, adding more than 1 million new customers in the last quarter, though it didn't say how many of those were on a paid plan that offers unlimited free shipping, similar to Walmart+ or Amazon Prime.
As a wholesaler and exporter, Target tried out some new hats this quarter and partnered with Canada's Hudson's Bay chain to sell its wildly popular children's clothing brand, Cat & Jack.
The company also The company is expanding its private label line, which it calls “owned brands.” Dealworth, the budget-friendly essentials brand We are working to improve the quality of our Up and Up line.
Unfortunately for Target, its efforts over the past few months have not translated into customers shopping there more frequently or making bigger purchases, which the company blames primarily on inflation-weary consumers and tighter budgets.
Heading into the summer, Target faces a difficult balance between boosting sales through deals and promotions while maintaining profitability in line with investor expectations.
“We are encouraged by the meaningful progress we've seen over the past few quarters,” Cornell said. “These trends strengthen our confidence that we are on the right track and poised to return to growth in the second quarter.”
