Target’s comparable sales broke its record, skyrocketing 24.3% in its second quarter 2020, and the retailer said physical stores were the key to this explosive growth, including an enormous spike in digital.
Shares of Target jumped as much as 9% in premarket trading, on the report that Target’s quarterly earnings crushed Wall Street's expectations, Market’s Insider reported. The 24% jump was nearly three times higher than the 8.6% rise analysts expected. Target’s Q2 results reflect “the continuation of heightened sales volume and significant investments in response to the COVID-19 pandemic,” the retailer said in a press release.
"Our second quarter comparable sales growth of 24.3% is the strongest we have ever reported, which is a true testament to the resilience of our team and the durability of our business model,” said Brian Cornell, chairman and CEO. “Our stores were the key to this unprecedented growth, with in-store comp sales growing 10.9% and stores enabling more than three-quarters of Target's digital sales, which rose nearly 200%. We also generated outstanding profitability in the quarter, even as we made significant investments in pay and benefits for our team.”
Target’s 195% spike in digital comparable sales in the quarter that ended August 1 accounted for 13.4 percentage points of Target's comparable sales growth. Shoppers took to Target’s same-day services, Order Pick Up, Drive Up and Shipt, which grew 273%. Meanwhile, Target’s stores fulfilled more than 90% of Target's second quarter sales.
"We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year,” said Cornell. “With our differentiated merchandising assortment, a comprehensive set of convenient fulfillment options, a strong balance sheet, and our deeply dedicated team, we are well-equipped to navigate the ongoing challenges of the pandemic, and continue to grow profitably in the years ahead."