Target Corp. announced that its sales increased, but comparable sales decreased for the fourth quarter of its fiscal year ended February 3, 2024. Meanwhile, for fiscal 2023 as a whole, both sales and comparable sales declined.
These results exceeded Target's expectations, the retailer said in a March 5 press release. “The efforts of our team have changed the momentum of our business, resulting in further improvement in sales and traffic trends in the fourth quarter and profitability significantly above expectations,” CEO Brian Cornell said in a written statement. We exceeded that.”
“Throughout the season, our guests have responded to the newness, value, inspiration and ease of our in-store and digital shopping experiences. Looking ahead, we continue to build on the strengths that have delivered strong financial performance over the long term. and continue to invest in our differentiators,” he continued.
Target is 5th place top 1000. This database is his web sales ranking of North American online retailers by Digital Commerce 360. Digital Commerce 360 classifies Target as a mass retailer.
How much does Target make from online sales?
Fourth-quarter sales increased 1.7% to $31.92 billion from $31.39 billion in the year-ago period. Target said this was driven by a 1.6% increase in sales and a 9.8% increase in other revenue.
Total comparable sales for the same period decreased by 4.4%. Same-store sales fell 5.4%, but online sales were relatively strong, down 0.7%. Target said online sales increased due to strong same-day services such as curbside pickup, Drive Up and Shipt. These accounted for more than 10% of total sales, which increased by 13.6% in the quarter. Sales of Drive Up were said to be the driving force behind the growth. Online sales accounted for 21.3% of total sales, a slight increase from 20.8% in Q4 2022.
Target said online sales were down year over year but improved in the third quarter. Online comparable sales decreased 6% year-over-year in the third quarter.
Operating income increased by the most significantly in the quarter. Sales increased by 60.9% to $1.87 billion.
Meanwhile, overall fiscal 2023 revenue declined 1.6% from 2022 levels to $107.41 billion. Total comparable sales for the same period decreased by 3.7%, and digital comparable sales decreased by his 4.8%. Online sales accounted for 18.3% of total sales in the same year, down from 18.6% in 2022.
For the full year, operating income increased 48.3% to $5.71 billion.
Target launches paid membership
The retailer announced a new paid membership program, Target Circle 360.
“And as part of a growth roadmap aimed at meeting consumers where they are, reigniting sales, traffic and market share growth, and positioning Target for profitable growth in 2024. We are rolling out new innovations, including a new Targeted Circle membership program. Beyond that,” Cornell said.
Target Circle 360 will be available on April 7th and will be available at a discounted rate of $49 per year until May 18th, after which the price increases to $99. Membership offers unlimited same-day delivery on orders over $35. Target said deliveries can take as little as an hour. Members also receive free 2-day shipping on their orders at Target.com. The retailer said members will also have access to other benefits such as partnerships in the future. Its Target Red Card has been rebranded as the Target Circle Card and is available for 5% off.
Target Circle will continue as a free tier of the membership program.
The new membership offering will further expose Target to direct competition from Amazon and Walmart, which offer similar programs.
“I understand why Target would want to introduce a paid loyalty scheme. However, as currently conceived, the program doesn't seem very attractive,” said the managing director of retail analytics firm Global Data. Neil Saunders said. “It's probably appealing to people who frequent Target and get a lot of deliveries, but beyond that it doesn't have much of an advantage against rivals like Walmart and especially his Amazon.”
Sanders said this announcement is a starting point for Target, which needs to continue to evolve.
“To be fair, Target has to start somewhere and will probably add more benefits over time, but at a time when most households are feeling subscription fatigue, We need to further deepen the value that our customers get,” Sanders added. “An even more positive aspect of this program is that it allows Target to further deepen its efforts in the retail media space.”
Target vacation results
Target's Black Friday and Cyber Monday sales “exceeded overall trends,” the retailer said of the peak shopping days. The retailer said its affordable toy selection and holiday meals were the main attractions for consumers, but declined to elaborate further.
Target revenue
For its fiscal fourth quarter ended February 3, 2024, Target Corp. reported:
- Total revenue increased 1.7% to $31.92 billion from $31.39 billion in the same period last year.
- Total comparable sales decreased 4.4% and digital comparable sales decreased 0.7%.
- Targeted online sales accounted for 21.3% of total sales.
For the 12 months ended February 3, 2024, Target reported:
- Total revenue was $107.41 billion, down 1.6% from 2022 levels.
- Total comparable sales decreased 3.7% and digital comparable sales decreased 4.8% during the same period.
- Target's online sales accounted for 18.3% of sales.
Due to rounding, percentage changes may not correspond exactly to dollar numbers. See more earnings reports. Here's the latest on Target from last quarter:
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