Plus, more earnings news from Lowe's, Nordstrom, L Brands, VF Corp. and TJX.

Target Corp., No. 16 in the Internet Retailer 2019 Top 1000, was one of the few exceptions to a not-so-great first quarter for many retailers. The mass merchant’s online sales jumped 42% in the first quarter ended May 4, compared with 28% growth during the same period a year earlier.

Target credits much of this growth to its same-day services, such as drive up, buy online pick up in store and delivery via Shipt, the delivery company it bought in 2017. The retailer offers in-store pickup in every one of its 1,851 locations and drive-up at more than 1,250 of its stores.

Target reported that these digital-based same-day services were responsible for 25% of its overall sales growth in the first quarter. And overall, Target’s total revenue reached $17.6 billion, up 5.0% from $16.8 billion last year in the first quarter.

“Throughout this year, we will continue to extend the reach of our same-day fulfillment options, strengthen our portfolio of owned and exclusive brands, remodel and open more stores and invest in our team,” said CEO Brian Cornell. “We’re confident that we’re well-positioned to deliver strong financial performance in 2019 and beyond.”

Target remodeled 53 stores in the first quarter and plans to remodel 300 in total. Its retail stores handled more than 80% of its first-quarter digital volume, including same-day options combined with digital orders shipped directly from stores to consumers’ homes, according to Cornell in an earnings call transcribed by Seeking Alpha.

advertisement

“Even today, on any given day, upwards of 50% of our orders are delivered next day, and it’s using our stores and their proximity as that advantage in our overall strategy,” Cornell says.

“Given our digital growth trajectory and the rapid adoption of our same-day services, we are on track to grow Target’s digital sales by more than $1 billion in 2019 and fulfilling even higher percentages of this volume from our stores,” says John Mulligan, Target’s executive vice president and chief operating officer in its earnings call.

However, Target’s first quarter operating income was 9% higher than the previous year’s quarter, Cathy Smith, Target’s chief financial officer, noted in the earnings call.

In other ecommerce earnings news:

  • Home improvement retailer Lowe’s Cos. Inc. (No. 23) reported its online says grew 16% for the first quarter ended May 3. The home improvement retailer also reported that 60% of its online purchases were picked up in our stores. “We remain focused on driving improved growth on Lowes.com as we work to increase our online assortments, continue to improve the shopping experience, and work the ships slower moving SKUs out of our stores and onto our website to improve inventory productivity,” CEO Marvin Ellison said on an earnings call transcribed by Seeking Alpha. Its total sales for the first quarter increased 2.2% to $17.7 billion, up from $17.4 billion in the first quarter of 2018.
  • Department store retailer Nordstrom Inc. (No. 18) reported a slowdown in ecommerce sales at 7% growth in the first quarter ended May 4, compared with 16% growth in the same period a year earlier. It attributes much of the slowdown to its decision to shift its digital marketing resources to its loyalty program. “With the Nordy Club rollout not ramping as we had projected, we experienced incremental traffic declines in our business. We have since increased our investments in digital marketing to drive traffic and sale,” says co-president Erik Nordstrom in an earnings call transcribed by Seeking Alpha. Total offline and online sales for the retailer declined 3.5% compared with the year-ago quarter.
  • TJX Cos. Inc., which sells online via TJMaxx.com and SierraTradingPost.com and is No. 149 in the Top 1000, reported its store sales increased 5% for the first quarter, over last year’s 3% increase in the same period. Although it didn’t break out exact ecommerce figures, it reported its total sales—which include ecommerce sales—increased 7% to $9.3 billion, compared with the prior-year quarter. The retailer says in-store shopper traffic was the primary driver of the increase. It also increased its store count in the first quarter by 75, bringing its total to 4,381 stores.  TJX also says nearly 50% of its online business in the U.K. was picked up the store.
  • VF Corp., parent company to such brands as The North Face, Timberland and Vans and No. 86 in the Top 1000, reported online sales increased 21% for the fourth quarter ended March 30 and 32% for the fiscal year. Its full fiscal year revenue increased 12% to $13.8 billion and also was up 6% for the fourth quarter.
  • L Brands Inc., No. 39 and parent of such brands as Victoria’s Secret and Bath and Body Works, reported net sales of $2.629 billion for the first quarter ended May 4, 2019, up 0.1% compared with sales of $2.626 billion for the prior-year quarter. Overall sales declined 5% for Victoria’s Secret in the first quarter, but increased 13% at Bath & Body Works. The company did not break out ecommerce figures.
Favorite

advertisement