Retailer Target (NYSE:TGT) has announced that its first-quarter sales rose 23% driven by the popularity of exclusive brands and services such as curbside pickup.
The discount retailer said it’s benefiting from a reopening U.S. economy that is driving sales, especially for clothing. Buoyed by its strong results, Target raised its second-quarter guidance.
Other retailers, including Walmart (NYSE:WMT), Home Depot (NYSE:HD) and Macy’s (NYSE:M), have also posted surprisingly strong first-quarter results. The companies have attributed sales gains to customers having more money in their pockets from government stimulus payments.
Target had unique advantages before the pandemic that kept its business strong throughout the COVID-19 crisis. The retailer fulfills nearly all its online orders at stores, which improves the company’s profits.
Target has also launched and grown numerous private label brands, which sets it apart from its rivals. And it was ahead of other retailers in raising employee wages, which has fended off a labour crunch. Shares of Target rose 4% in pre-market trading Wednesday on the financial results.
The company’s earnings per share came in at $3.69 U.S. versus $2.25 U.S. that had been expected by analysts. Total revenue rose 23% to $24.2 billion U.S. from the same period a year ago, outpacing analysts’ expectations of $21.81 billion U.S. Net income jumped to $2.1 billion U.S., or $4.17 U.S. per share, from $284 million U.S., or 56 cents U.S. per share, a year earlier.
Target said that it has continued to attract new customers and entice them to spend more. It said it picked up $1 billion U.S. in market share in the first quarter, on top of $9 billion U.S. in market share last fiscal year.
The discount retailer said it expects comparable sales to grow by the mid-to-high single digits in the second quarter and by the single digits in the last two quarters of this year. Target also said that it is on track to invest about $4 billion U.S. this year to improve the customer experience and increase its store footprint.