• by Thom Forbes  @tforbes, January 16, 2020

Target yesterday announced  that its holiday sales were weaker than it had been expecting, and some analysts were quick to wonder if the results auger a more widespread malaise in the toys and electronics categories that dragged down otherwise auspicious results.

“Especially this holiday season, Target was expected to be a winner in the toys category. The company has been devoting more square footage in stores to toys, following Toys R Us’ liquidation. It has partnered with Disney to open mini Disney shops within certain Target shops. Target also is now  powering  the website of the Toys R Us brand that has relaunched post bankruptcy,” CNBC’s Lauren Thomas and Courtney Reagan write.

“But this holiday season, Target said toy sales were about flat with the prior year. The company did say, however, that it continued to gain market share in toys throughout the holidays, based on tracking data provided by The NPD Group,” they add.

“‘The chickens are coming home to roost from the Toys R Us bankruptcy,’ Richard Gottlieb, CEO of Global Toy Experts, tells  CNBC’s Sarah Whitten on MSN Money. “You cannot eliminate that many toys from the marketplace (remember TRU had vastly more items) without it having an impact. A great loss of incremental and impulse sales.”

“Target said comparable sales for electronics were down more than 6% in November and December. The home category, down about 1%, was another area of weakness…. These three categories are key for the holiday season and have a big impact on sales growth, Target said,” Tonya Garcia writes  for MarketWatch.

“While we knew this season was going be challenging, it was even more challenging than we expected. On the topline, our comparable sales grew 1.4%, reflecting 19% growth in digital, which was below our guidance -- a tough miss considering how hard our team worked all season long,” CEO Brian Cornell says  in a Q&A published on the Target website.

He also pointed to some good news.

“We saw strength -- both sales and market share gains -- in frequency categories like Essentials and Food & Beverage. Beauty was a true standout. Apparel -- a high margin business -- also performed exceptionally well,” Cornell said.

“Investors had been looking for fourth-quarter sales growth of between 3% and 4%, which would have marked a slight deceleration compared to last quarter's 4.5% spike. CEO Brian Cornell and his team issued that aggressive forecast following a blockbuster third-quarter report that showed plenty of shopper enthusiasm for its offerings both in stores and online. Target's Q3 digital sales jumped 31% and overall customer traffic spiked 3.1%,” Demitrios Kalogeropoulos writes  for The Motley Fool.

“Some analysts said the year-end results at Target didn’t necessarily signal weakness in its strategy. They pointed to a holiday season that had six fewer days between Thanksgiving and Christmas compared with the prior year, which compressed the time for stores to deliver packages to homes and shoppers to make impulse purchases. There were also fewer new electronics devices on the market to entice gift buyers, analysts said,” Sarah Nassauer points out  for The Wall Street Journal.

Other “say they weren’t expecting toy sales to match the growth of the prior holiday season, when the closing of Toys R Us stores sent shoppers elsewhere,” Nassauer continues.

In other news, Target “announced a shake up of its executive ranks yesterday,” Chris Isidore and Nathaniel Meyersohn write&am p;am p;nb sp;for CNN Business. “Janna Potts, a 30-year veteran of the company, is retiring as executive vice president and chief stores officer, to be replaced by Mark Schindele, a 20-year veteran of the company himself. It also announced two chief merchandising officers. Christina Hennington  will oversee merchandising for hardline and essentials, while Jill Sando  will be in charge of merchandising for style.”

“The sentiment among several Wall Street analysts Wednesday was that Target's holiday results did not signal a systemic problem at the company, but rather a slowdown in key holiday areas like toys,” Isidore and Meyersohn also say.

“Target remains a good retailer on the right trajectory,” GlobalData RetailNeil Saunders tells them.

Or, as Yahoo Finance’s Brian Sozzi writes, “With success often comes higher expectations. That looks to be a lesson Target -- and its upbeat investors -- will be consistently reminded of in 2020 after a blistering 2019 campaign that saw blowout sales and earnings seemingly every quarter.”