Target's Quarterly Results: Competitive Difference Is 'Delightful'
In a conference call discussing its results, the company credited its "Expect more, pay less" marketing strategy for the strong results, as well as its commitment to encouraging shoppers to visit stores more often.
Increasingly, food is playing a key role in these more frequent visits, executives said, including Target's Archer Farms label. (The company says it has increased the penetration of private-label food products to 15%.)
The company is also expanding its line of authentic Hispanic food, expanding its self-service delis, and selling more organic food and locally grown produce. It has also upped its prepackaged produce offerings, both for convenience and to emphasize food safety.
To get more repeat visits from fashionistas, the Minneapolis-based retailer is also still working on shortening its production cycles, to better compete with other fast-fashion chains, as well as increasing its "limited time" assortments. In the coming quarter, executives said, these will include Devi Kroell-designed handbags, in metallic animal skins and jewels, as well as the new Libertine line for teens by Cindy Greene.
Weak spots included a very soft two-week period in April, as well as disappointments in seasonal merchandise, music, movies, and intimate apparel. Spending was strong in consumer electronics, as the company expanded its flat-screen TV offerings, as well as in newborn, infant and toddler clothing.
For May, Target expects same-store sales to gain a hefty 5% to 7%, followed by smaller June numbers, due to the timing of the Memorial Day holiday. And in the second quarter, the company plans to open 42 new stores, include 10 SuperTargets.