On Wednesday, Target reported disappointing results. The shares of big-box retailer declined by 7% after this announcement.
Based on the information, same-store sales increased only by 1.4% during November and December. For example, during the same period of time in 2018, same-store sales rose 5.7%.
Nevertheless, the company did not change a prior outlook for fourth-quarter earnings. Moreover, despite all of the problems, same-store sales rose for the last 11 months.
The company had big plans regarding the toys. It partnered with Disney to open mini Disney shops within certain Target shops. Also, the company devoted more space to toys. Nevertheless, toy sales remained at the same level when compared with the result from the last year.
Furthermore, electronics sales declined by more than 6% in November and December. Another problem is that sales of home items fell by about 1%.
Hopefully, apparel sales increased by about 5%, and beauty sales added roughly 7%. Also, food and beverage sales climbed nearly 3% during the holiday season.
To sum up, sales of electronics and appliances rose 4.6% from November 1 through December 24. Meanwhile, the home furniture and furnishings category climbed 1.3% based on the data from the Mastercard Spending Pulse.
Target’s digital sales increased by 19% as the number of people are using same-day options such as curbside pickup when they buy online.
Holiday season and shares
One of the major reasons why the target reported disappointing results might be connected with the number of days. For example, in comparison with 2018, last year’s holiday season had six fewer days from Thanksgiving to Christmas. It was the shortest possible calendar.
Some people did not expect this information, as the retailer expected a strong holiday season. In this situation, it is not surprising that the share of big-box retailer declined after reporting the results.