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The
company said it had set aside nearly $500 million to spend on
maintaining safety standards at stores and pay employees higher
wages for working through the pandemic.
"Last quarter was unlike anything I've ever seen," Chief
Executive Officer Brian Cornell told reporters. "It was intense,
it was volatile, it was stressful for our guests and the
country."
Stay-at-home orders imposed to contain the virus powered a 141%
jump in Target's online comparable sales, accounting for almost
all of its same-store sales growth.
Although sales at stores opened for at least a year rose 0.9%,
including digital they jumped 10.8% in the first quarter ended
May 2, beating expectations, according to IBES data from
Refinitiv.
At the start of the quarter, Target, like Walmart <WMT.N>,
benefited from customers stockpiling staples and cleaning
products, but as the lockdown extended and the stimulus checks
arrived, demand rose for discretionary goods.
Cornell said he expects demand for non-staple items like beauty
products, home goods and clothes to continue into the current
quarter.
Target, which has already pulled its financial targets for the
year, said it would scale back planned investments to focus on
meeting increased demand.
"There's just so much uncertainty as I think about the balance
of the year ... Obviously we're watching closely to see what
happens from an economic standpoint," Cornell said.
The company's net earnings fell 64.3% to $284 million in the
quarter. On an adjusted basis, the company earned 59 cents per
share, beating already lowered expectations of 40 cents.
Last month, Target warned that higher expenses would pressure
margins, prompting analysts to lower their estimates.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by
Sriraj Kalluvila and Anil D'Silva)
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