Goal, increase TJX sales as buyers come back

Target Corp.

TGT 6.09%

,

Lowe’s

LOW -1.05%

Cos. And the owner of

TJ Maxx

TJX -5.29%

reported strong sales and an increase in store visits in the spring, as Covid restrictions eased and people returned to shopping in physical stores.

The good results released on Wednesday follow similar reports earlier this week from other national channels, including

Home Depot Inc.

and

Macy’s Inc.

Many of these retailers have taken advantage during the pandemic of the ability to stay open and switch to online ordering, or they are now capturing pent-up demand when they reopen.

“The first quarter felt like a first step towards a post-pandemic world,” Target CEO Brian Cornell said on a call with analysts Wednesday. “With vaccinations rolled out across the country and consumers becoming more comfortable to venture out, we’ve seen an enthusiastic comeback of in-store shopping,” he said.

How will the pandemic affect US retailers? As states across the country struggle to get back to business, the WSJ is studying the changing retail landscape and how consumers might shop in a post-pandemic world.

At Target, same-store sales – of stores and digital channels that have been in business for at least 12 months – were up 23% from a year earlier in the quarter ended May 1. The growth rate was double that of the same quarter last year when people rushed to buy food and staples at the start of the pandemic.

Biggest rival

Walmart Inc.

reported Tuesday comparable store sales up 6% in its last quarter, a gain slightly lower than in the period of the previous year. Walmart executives said sales benefited from government stimulus checks and pent-up consumer demand.

TJX Cos., Who owns TJ Maxx, Marshalls and HomeGoods, said on Wednesday that first-quarter comparable sales of open stores were up 16% from the same period in 2019 and net sales were up 8.7 % compared to 2019.

Strong sales, especially of clothing, indicated that consumers “were starting to return to more normal activities,” said Ernie Herrman, managing director of TJX. He said sales trends for the start of the second quarter remained strong.

TJX suffered during the pandemic because only a small portion of its sales are digital. Comparable store sales at stores opened in the division that houses TJ Maxx and Marshalls, which primarily sell clothing, rose 12% in the last quarter, while its HomeGoods division grew 40% from 2019.

Lowe’s said its comparable sales grew 26% in the quarter ended April 30, as people continued to buy home improvement items, one of the biggest winners in the product category during the pandemic . Home Depot’s most recent comparable quarterly sales increased 31%.

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The Target saw gains across all categories, while its results also suggested changes in shopping behavior as more people ventured out or held social events. Clothing sales are up more than 60%, Target said, and sales of home products and hard products, such as small appliances, are up more than 30%. Sales of food and basic necessities, which saw big gains last year, increased by a few percentage points.

The company’s overall sales through digital channels grew 50% in the last quarter, a slowdown from the same period last year, when sales were up 141%. Store visits increased 17% year over year.

Target reported quarterly profit of $ 2.1 billion, up from $ 284 million a year earlier, on strong sales of higher-margin items such as clothing and store brands. Total revenue increased 23% to $ 24.2 billion.

For the current quarter, Target expects same-store percentage growth in mid-to-high digits.

The worker shortages plaguing many retailers and restaurants are not being felt at Target, Mr. Cornell said, due to the investments in wages and other benefits. Target increase in wages for hourly workers to at least $ 15 per hour Last year.

Write to Sarah Nassauer at [email protected] and Suzanne Kapner at [email protected]

Corrections and amplifications
TJX Cos. Said first quarter comparable sales for open stores increased 16% from same period in 2019 and net sales increased 8.7% from 2019. An earlier version of this story compared incorrectly first quarter sales of this year to 2020, rather than 2019, and did not distinguish between same-store sales and net sales.

Comparable store sales for stores opened in the division that houses TJ Maxx and Marshalls grew 12% in the last quarter, while its HomeGoods division posted 40% growth from 2019. An earlier version of this story did not state that the numbers were for like-for-like sales and incorrectly compared the latest results to 2020, rather than 2019 (Corrected May 19).

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