Target's same-day services fuel record growth

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Target Corp. reported quarterly profit and revenue that exceed Wall Street expectations as COVID-19 fueled demand for same-day services.

The Minneapolis-based big-box retailer reported net earnings rose 66% from a year ago to $1.38 billion, or an adjusted $2.67 per share. Revenue was up 21% to $28.34 billion. Wall Street analysts surveyed by Refinitiv were anticipating earnings of $2.54 per share on revenue of $27.48 billion.

Same-day services, which include order pick up, drive up and Shipt, increased by 212%, helping boost same-store sales by 21%. Comparable traffic grew 6% and average ticket size increased by 13%.

“Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020, as our guests turned to Target to safely provide for their families throughout the pandemic,” CEO Brian Cornell said in a statement.

Target continued to gain market share in all five of its merchandising categories, helping 2020 sales grow by more than $15 billion – greater than the 11 previous years combined. The company gained about $9 billion in market share last year.

Target cited continued uncertainty surrounding COVID-19 as reason for not providing guidance. The company has not issued an outlook since withdrawing its guidance in March of last year.

Shares were up 5.42% this year through Monday, outperforming the S&P 500’s 3.88% gain.

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