This Company’s Profit Hits Beyond the Target

by Kate Hynson

Financial Frequency. myNews

August 26, 2019 .2 min read

The well-known retailer that Americans love to create a buzz about, is making headlines. Customers claiming that they go in to buy a pen and leave with half of aisle twelve is just the beginning of the hype around this retailer. It’s Target! 

Give Me the Numbers

It’s no surprise that the much-loved retailer shared this week that they surpassed the expected earnings for Q2, with a revenue of $18.42 billion.

Target revealed that its comparable sales are up 3.4 percent in Q2. But this isn’t the first time they’ve received a bit of positive Q2 news, as last year the Q2 comparable sales were up 6.5 percent.

However, it's been over two years, since the retail giant has seen comparable sales results like the ones they are reporting today.

Target shared that its GAAP EPS also saw an increase this quarter. The GAAP EPS is up 22 percent from this quarter of 2018. From these earnings and benchmarks, Target predicted that the second half of 2019 would also include comparable sales growth for them.   

How They Hit the Mark 

It could be argued that Target has undoubtedly put in their fair share of work to see a recent profit rise.

The company partnered with HGTV Fixer Upper’s Chip and Joanna Gaines and launched their “Heart and Hand with Magnolia” line in November 2017. In Q2 alone, Target launched its own line of workout clothing for young girls, known as More Than Magic, and held a successful partnership with Vineyard Vines.

Now, in September of this year, Target will launch an exclusive anniversary line with Lilly Pulitzer. 

Beyond partnerships, the company has taken focus on customer convenience, emphasizing on same-day service shipment, drive-up service and order pickup. The company released the information that they nearly doubled their amount of drive-up orders for Q1 and Q2 from 2018 to 2019 - fulfilling around 5 million orders in the first half of 2019.

Their efforts are equally as focused on consumer experience, as well - they’re aiming to remodel 300 stores this year. Not to mention, you can find some new small-format Target stores popping up along the U.S. map, as well. 

What’s Next 

It’s no secret that Target is up against some fierce competitors. But could their recent successes mean that soon they’ll be nipping at Walmart’s heels?

And what about the click-to-order world of Amazon? With the upcoming launch of their grocery line, Good & Gather, they could be soon.

What’s certain for now is that with an increase in revenue, operating income, and margin rate, Target is optimistic about what its Q3 earnings will look like.

Their ability to reel new consumers in and maintain a loyal customer base could make the competition a little bit closer moving forward. Watch out Walmart; you’ve got a Target on your back.