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Digital comparable sales in the second quarter rose just 10%,
against a 195% rise in the same period a year earlier, when
customers relied on Target's same-day delivery services, such as
Drive up, Shipt and in-store pickups, for their shopping needs
during the pandemic. Online sales rose 50% in the first quarter.
Total comparable sales rose 8.9% in the three months ended July
31, edging past expectations of 8.68%, according to IBES data
from Refinitiv.
Shares of Target, which also announced a new $15 billion share
repurchase program, fell 1.3% in pre-market trading, having
gained about 45% this year.
Target's results underline a rebound in store buying and a
return to pre-pandemic behavior in the United States as
vaccinations and eased restrictions encourage more people to
step out.
"We believe that America still embraces stores and the traffic
we are seeing tell us that stores continue to play an important
role," Chief Executive Officer Brian Cornell said.
Walmart's quarterly report, on Tuesday, also signaled that more
people are returning to stores, as well as slowing online sales
after a record year.
While second-quarter sales rose across major categories at
Target, apparel particularly benefited from an early start to
the back-to-school season from President Biden administration's
advance child tax credit.
That boost is expected to extend into the current quarter, even
as supply chains disruptions, higher labor costs and the
fast-spreading Delta variant threaten to dent an economic
recovery.
The second half of the year will likely continue to be volatile
particularly with the uncertainty caused by the Delta variant,
Cornell added.
Total revenue rose 9.5% to $25.16 billion, while excluding
items, the company earned $3.64 per share, beating expectations
of $3.49.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by
Sriraj Kalluvila)
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