Don’t expect empty shelves at Target over the holidays, apparently.
During a Wednesday morning conference call to discuss the company’s third-quarter results, Target execs reaffirmed that the retailer is prepped and ready for an influx of holiday shoppers, even amid supply chain constraints snarling commerce around the globe.
“We’ve made a big investment in both inventory and in staffing to make sure we are going to be there to provide the items the guest is looking for and great service,” Target CEO Brian Cornell told analysts and reporters on the call.
In contrast to smaller retailers, Target Corp. certainly has the financial means to tackle supply chain concerns head-on. In early September, the retailer announced that it had chartered its own vessel to transport goods from overseas. “As co-managers of the ship, we can avoid delays from additional stops and steer clear of particularly backed-up ports,” Target officials said at the time.
And Target’s quarterly growth streak doesn’t appear to be slowing any time soon. In the company’s third fiscal quarter, Target reported total revenue of $25.65 billion, up 13.3 percent compared to the same quarter in 2020.
Each quarter, profit has been growing right alongside sales. In its third quarter, Target reported a net income of $1.488 billion, up a whopping 46.8 percent compared to the prior year.
Digital sales, meanwhile, are also growing, though Target’s brick-and-mortar stores end up fulfilling most orders. Third-quarter comparable digital sales ticked up 29 percent. Still, stores fulfilled 96.7 percent of orders in the quarter, mirroring trends in earlier quarters. Target has long touted its “stores-as-hubs” model, where stores essentially function as both fulfillment centers and standard retail outlets.
Target may soon occupy a rare place in Minnesota business history: The retailer is likely to surpass $100 billion in revenue this year. According to the Star Tribune, only UnitedHealth Group and Cargill Inc. have ever hit that mark.
Whether all that is enough to woo Wall Street remains to be seen. As of early Wednesday morning, Target’s stock was down more than 5 percent. Consumer prices, which have grown at their highest clip since 1990, may threaten the retailer’s sales going forward. In the call on Wednesday morning, Target execs maintained that they are doing their best to keep the cost of goods down. “We are protecting our prices,” Cornell said. Consumers may appreciate that, but it could impact Target’s margins going forward.