As in-house brands and easy delivery options easily drew its strongest traffic ever and same-store sales growth in well over a decade, Minnesota-based retail giant Target was able to deliver better-than-expected earnings during the holiday period, which is the most critical sales period of any year.
This meant that the company's current earnings per share had hit a record, what with its digital sales surging more than 2.5 percent for the fifth year in a row. While that may not seem like a stretch, it's also important to note that all of this happened while the company's income slid by 26.5 percent.
Just this Tuesday, shares of the company rose up by about 4 percent.
Progress and growth
Speaking to CNBC's "Squawk Box" after the released report of the earnings, Target CEO Brian Cornell said, "We feel great about the progress, the investments we've made at the stores, our brands, and importantly in our team have paid off. And I think that we saw that in our full year 2018 results, but more importantly the guidance for next year."
Per the company's report for the 4th fiscal quarter that ended on February, net income fell 26.5 percent to $799 million. This is equivalent to $1.52 per share, or $1.99 per share when compared to last year's $1.1 billion. However, the company's overall revenue is still high and is currently flat at $23 billion.
"We continue to see great performance both from a store standpoint and a digital standpoint," Cornell said to CNBC in the latest interview.
And that statement rings true, as sales for Target locations that have been open for at least a year were up by 5.3 percent, while brick-and-mortar stores grew by 2.9 percent. Online stores are also up by 31 percent. Overall, the new growth is better than the expected growth of just 5.1 percent. The company also experienced its strongest growth since 2005, garnering a 5 percent increase in total same-store sales. Furthermore, Target's e-commerce sales climbed 36 percent in 2018.
Looking to fiscal 2019, the company says that it anticipates a low-to-mid-single-digit increase in same-store sale, and currently has plans of remodeling about 300 stores this 2019, as well as another 300 in 2020. The retail chain also plans on opening more small-format stores in cities and on college campuses this year, with COO John Mulligan naming Santa Barbara, Washington, Cape Cod, and Seattle as some examples.
