Talk about mixed emotions. Target released an updated financial report Wednesday (March 25) that shows dramatically increased revenue booked since the COVID-19 crisis shut down non-essential stores. It is a look at what the retail industry can expect as other essential retailers report results as March closes.
For the first three weeks of the first quarter, which began on Feb. 2, Target’s total company comparable sales and category mix were in line with expectations and prior financial guidance. Beginning with the fourth week of February and into the first part of March, Target saw an increase in traffic and in-store comps. For the month of February, its total comparable sales increased 3.8 percent. Then came March.
Beginning in mid-March, the company experienced what it says was “an even stronger surge in traffic and sales, with category mix heavily concentrated in the Essentials and Food & Beverage categories.” Increased sales were also seen in Home Office and Entertainment, while Apparel & Accessories dropped. “Month-to-date in March, overall comparable sales are more than 20 percent above last year, with comparable sales in Essentials and Food & Beverage up more than 50 percent. During that same period, comparable sales in Apparel & Accessories are down more than 20 percent compared with last year,” according to the company.
However, citing the uncertainty in consumer spending and the government relief plans amid the coronavirus pandemic, Target withdrew guidance for Q1 and the full year. “During these unprecedented times, the benefits of our strong balance sheet and diverse, multi-category assortment are particularly important,” said Michael Fiddelke, executive vice president and chief financial officer. “With the best team in retail focused on serving our guests, and ample financial capacity to navigate a highly uncertain outlook, we are confident that Target will emerge from the current environment with an even stronger guest relationship and continue to operate from a position of financial strength.”
Target also said Wednesday it will delay plans to remodel hundreds of stores, open new ones and increase curbside pickup. CEO Brian Cornell said the retailer will focus on a singular mission: providing food, medicine and other essential items during the coronavirus pandemic.
In an interview on CNBC, Cornell said he meets with his team every day to adapt to new shopping patterns. “None of us know how long this virus is going to last,” he said. “We don’t know when Americans are going to go back to work. Obviously, it’s great to wake up this morning and see that the stimulus package has been approved, but we don’t know all the details. So it’s been really hard for us to say how long will this go on.”
And how long will it go on? Apple said on Tuesday, in a leaked memo to staff obtained by Bloomberg, that the company is planning to reopen its retail stores “in the first half of April.” However, it noted that Apple will reopen the stores “on a staggered basis” and cautioned that changes on the ground could affect actual timelines.
Apple closed 458 retail stores across the world and initially said that it would reopen the stores on March 27. However, that was changed to “until further notice.”