Comparable sales grew 22.9%; digital gain was 50%

MINNEAPOLIS — Target Corp. on Wednesday said that its comparable sales grew 22.9% in the first quarter, on top of 10.6% growth last year. Comp sales in stores increased 18%, and digital comparable sales grew 50%, on top of 141% growth a year ago.

Same-day services (Order Pickup, Drive Up and Shipt) grew more than 90%, led by a 123% increase in Drive Up.

“Our performance in the first quarter was outstanding on every measure, and showcased the power of putting our stores at the center of our strategy,” Target chairman and chief executive officer Brian Cornell said. “Store comp sales grew 18% percent in the quarter, even as they also fulfilled more than three-quarters of Target’s digital sales — including more than 90% growth of our same-day services. Importantly, market-share gains of more than $1 billion in the first quarter, on top of $1 billion in share gains a year ago, demonstrate Target’s continued relevance with our guests, even as they have many more shopping options compared with a year ago.

“Given the trust we’ve built with our guests quarter after quarter and our commitment to adjusting along with them to the ongoing shifts in the macro environment, we’re confident in continued comp growth in the second quarter and through the remainder of the year, as well as a healthy full-year operating margin rate.”

The company said it gained more than $1 billion in market share in the first quarter, on top of a $1 billion share gain in the first quarter of  2020. Net income increased to $2.1 billion, or $4.17 per share, from $284 million, or 56 cents per share, a year earlier. Total revenue for the quarter was $24.2 billion, up 23% from the prior-year period, beating analyst expectations.

For the second quarter of 2021, Target expects mid-to-high single-digit growth in comparable sales. The company expects its second-quarter operating margin rate will be well above the second quarter 2019 rate of 7.2%, but likely not as high as last year’s unprecedented 10%.

Target also expects positive single-digit comparable sales growth in the last two quarters of the year, and expects its full-year operating margin rate will be well above the 2020 rate of 7% percent, with the potential to reach 8% or somewhat higher.