Highlights:
Third quarter comparable sales grew 20.7 percent
Comparable traffic grew 4.5 percent, and average ticket grew 15.6 percent
Store comparable sales increased 9.9 percent
Digital comparable sales grew 155 percent, accounting for 10.9 percentage points of
Same-day services (Order Pick Up, Drive Up and Shipt) grew 217 percent
More than 95 percent of
Third quarter GAAP EPS from continuing operations of
For additional media materials, please visit: https://corporate.target.com/article/2020/11/q3-2020-earnings
'Our strong results in 2020 reflect the benefits of our multi-year effort to build a durable and flexible model, with a differentiated assortment and a suite of industry-leading fulfillment options - all brought to life through the passion and effort of our team. As a result, we've seen a deepening level of engagement and trust from our guests. The result is unprecedented market share gains and historically strong sales growth, both in our stores and our digital channels,' said
Fiscal 2020 Guidance
During the first quarter, the Company withdrew its guidance given the unusually wide range of potential outcomes, in light of the highly fluid and uncertain outlook for consumer shopping patterns and the impact of COVID-19.
Operating Results
The Company's total comparable sales grew 20.7 percent in the third quarter, reflecting comparable stores sales growth of 9.9 percent and digital sales growth of 155 percent. Total revenue of
Third quarter operating income margin rate was 8.5 percent in 2020 compared with 5.4 percent in 2019. Third quarter gross margin rate was 30.6 percent, compared with 29.8 percent in 2019, reflecting the benefit of merchandising actions, primarily from exceptionally low markdown rates, partially offset by the impact of higher digital fulfillment and supply chain costs, along with unfavorable category mix. Third quarter SG&A expense rate was 20.5 percent in 2020, compared with 22.3 percent in 2019, reflecting the benefit of leverage from strong sales growth, partially offset by the net impact of other factors, primarily investments in team member pay, benefits, and safety.
Interest Expense and Taxes
The Company's third quarter 2020 net interest expense was
Third quarter 2020 effective income tax rate was 21.9 percent, in line with 21.7 percent last year.
Capital Deployment and Return on
The Company paid dividends of
The Company has recently taken a number of actions in light of its strong operating performance and cash position.
Today, the Company announced it has lifted its share repurchase suspension, which it had announced on
In October, the Company executed a debt tender offer, deploying
In early November, the Company terminated a supplementary 364 day credit facility, which had been secured in April given the uncertainty around COVID-19.
For the trailing twelve months through third quarter 2020, after-tax return on invested capital (ROIC) was 19.9 percent, compared with 15.0 percent for the twelve months through third quarter 2019. The increase to ROIC was driven primarily by increased profitability combined with a decrease in the base of invested capital. The tables in this release provide additional information about the Company's ROIC calculation.
Webcast Details
Miscellaneous
The statement in this release regarding the Company's expected resumption of share repurchase activity in 2021 is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. Such statement is subject to risks and uncertainties which could cause the Company's actions to differ materially. The most important risks and uncertainties are described in Item 1A of the Company's Form 10-K for the fiscal year ended
About
For more on the
1Adjusted EPS, a non-GAAP financial measure, excludes the impact of certain discretely managed items. See the tables of this release for additional information about the items that have been excluded from Adjusted EPS.
Consolidated Statements of Operations: See detailed results at:
https://investors.target.com/news-releases/news-release-details/target-corporation-reports-third-quarter-earnings
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