Digital comparable sales increase by 155%
MINNEAPOLIS — Target Corp. reported a 20.7% increase in comparable sales in the third quarter, driven by a digital comparable sales gain of 155%.
Store comparable sales increased 9.9%, comparable traffic grew 4.5%, and the average ticket grew 15.6%, the company said. Same-day services (Order Pick Up, Drive Up and Shipt) grew 217%, and Target said that more than 95% of its third-quarter sales were fulfilled by its stores.
“Our strong results in 2020 reflect the benefits of our multi-year effort to build a durable and flexible model, with a differentiated assortment and a suite of industry-leading fulfillment options — all brought to life through the passion and effort of our team,” Target chairman and chief executive officer Brian Cornell said. “As a result, we’ve seen a deepening level of engagement and trust from our guests. The result is unprecedented market share gains and historically strong sales growth, both in our stores and our digital channels. In preparation for the holiday season, we focused first on the safety of our guests and our team, making changes to eliminate crowds while enhancing our fast-growing, contactless options like in-store pickup, Drive Up and Shipt. In a holiday season that will feel different for our guests, we’re committed to helping them navigate the season safely, as they find new ways to celebrate with family and friends.”
Total revenue of $22.6 billion grew 21.3%t compared with last year, driven by sales growth of 21.3% and an 18.1% increase in other revenue. Operating income was $1.9 billion in the third quarter, up 93.1% from $1 billion in 2019.
Target said its third-quarter operating income margin rate was 8.5% in 2020 compared with 5.4%t in 2019. The third-quarter gross margin rate was 30.6%, compared with 29.8% in 2019, reflecting the benefit of merchandising actions, primarily from exceptionally low markdown rates, partially offset by the impact of higher digital fulfillment and supply chain costs, along with unfavorable category mix. Third-quarter SG&A expense rate was 20.5% in 2020, compared with 22.3% in 2019, reflecting the benefit of leverage from strong sales growth, partially offset by the net impact of other factors, primarily investments in team member pay, benefits, and safety.