Target earnings take a hit
Retail Editor 1 -- Furniture Today, November 21, 2013
Minneapolis - Although home textiles rang up the strongest sales in Target's home department during the third quarter, home overall delivered a small decline in comp store sales.
During this morning's quarter conference call with analysts, execs said although average spend has grown across the store, customers are shopping less frequently.
Other takeaways from the call:
- Shoppers are responding well to the Nate Berkus home collection, so Target will roll out a holiday themed collection under the brand that includes bedding, gifts and décor;
- The store-pickup program for online orders, which recently expanded to all U.S. stores, is seeing the strongest response for baby goods, furniture and electronics;
- Target saw double-digit growth in digital traffic during the third quarter and triple-digit gains in traffic coming from mobile devices;
- The Cartwheel program that launched six months ago now has nearly three million users;
- RedCard holders spend nearly 50% more than those whose aren't part of the loyalty program.
- The company is still fine-tuning its assortment in the Canadian division and as a result has to clear out excess inventory.
With Canada provided a larger-than-expected loss during the quarter and cautious shoppers in the U.S., net income dropped 46% to $341 million during the quarter ended Nov. 2.
Sales rose 4.0% to $17.3 billion, with U.S. comps eking up 0.9%. The Canadian division opened its first stores in April, so no year-over-year comparisons are available.
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