Target CEO Brian Cornell Discusses the Retailer’s Stellar Year
Target chairman and CEO Brian Cornell spoke out on the heels of earnings news that the retailer delivered its strongest comparable sales growth in over a decade.
“When we announced our strategic investment in our business in 2017, we said that 2018 would be a transition year,” Cornell said in Target’s blog post. “Instead, it turned out to be one of the most productive in our history, making our results even more meaningful.”
Shares of Target jumped following the earnings news, in which Target beat analyst estimates across the board, according to The Motley Fool.
Comparable sales in Target’s fourth quarter of 2018 grew 5.3%, with stores contributing 2.9% and digital sales contributing 2.4% of that growth. Comparable digital sales surged 31% and traffic grew 4.5%.
Cornell gave his team all the credit for what he called "some of our strongest results in a generation," during the company's earnings call.
"This performance isn’t simply a reflection of a strong consumer environment," he said. "These results were years in the making. Proof of the progress we've achieved against our multi-year strategy, to transform our company, deliver strong, consistent and durable growth, and emerge as one of the industry leading retailers for years to come."
Target laid out an investment plan two years ago and efforts are begining to pay off with tangible results. For example, during the quarter, Target stores fulfilled three of every four orders—effectively doing the work of 14 fulfillment centers.
“We committed to reimagine our stores, reinvent our supply chain, reposition our owned brand offerings, rethink pricing and promotions, repurpose our technology and reinvest in our team,” said Cornell in the blog post.
“Since then, we’ve done exactly what we set out to do, and moved faster than we expected,” he continued. “We’ve built up the broadest range of fulfillment options in retail. Guests coast to coast can now have a Shipt shopper deliver groceries to their door, or pull up in our parking lot and have a team member bring their purchase right out to their car with Drive Up. We’re well on our way to remodeling more than 1,000 stores to make shopping even easier and more inspiring. And we continue to launch exciting new brands that keep guests coming back for more.”
Target is investing in technology to strengthen execution and maximize efficiencies in the back of the house, so the retailer can shift focus to driving guest-facing service.
As Cornell noted in the earnings call, Target's digital growth isn't coming at the expense of stores.
"It's making stores more relevant because the convergence between physical and digital, well it’s closer than ever at Target, and that's because we invested to build industry leading digital and technology teams," he said.
For full-year 2019, Target expects a low- to mid-single digit increase in comparable sales and a mid-single digit increase in operating income. The company is also committed to raise its starting wage to $15 by the end of 2020.
“Reflecting on the team’s progress and thinking about all the amazing things in Target’s future gets me really excited to come to work every morning,” said Cornell in the blog post. “I’m not sure I’ve ever been prouder to be a part of this brand, and to lead this great company, than I am right now.”
Click here for the full Target Q&A with CEO Brian Cornell.