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Target reports rise in sales following price cuts made in early summer to kickstart business
Target’s comparable sales rose for the first time in a year as grocery aisle deals for cash-strapped customers began to pay off.
Sales at stores and digital channels operating over at least the past 12 months rose 2% in the second quarter reversing months of declines, including a 3.7% drop in the previous quarter, and a 4.4% decline during the company’s final quarter of last year.
The number of transactions at the Minneapolis retailer increased 3% compared with the same period last year, with all six main merchandising categories, including fashion and home goods, showing strength. Online sales rose 8.7% and comparable sales in clothing increased 3% compared with a year ago as customers embraced new store brands like All in Motion and Wild Fable.
Target’s profits and sales beat Wall Street expectations and the company increased its annual profit outlook, but said sales this year could come in at the low end of its guidance for unchanged to a 2% increase.
Shares spiked $18.17, or 13%, to $161.38 in Wednesday trading.
“We are seeing an incredibly resilient consumer in the face of high inflation,” Target’s CEO Brian Cornell said. “They are looking for newness, but they are also shopping, looking for value.”
More than 50% of Target’s annual sales come from discretionary items like toys, fashion and electronic gadgets. That had become problematic with Americans laser focused on necessities like groceries after a run-up in inflation after the pandemic.
“One thing that we think helped Target this quarter is a more pronounced focus on value,” wrote Neil Saunders, managing director of GlobalData, in a research note. “Target’s retooling of its value position is a sensible response to the current environment, and it should continue to deliver results across the quarters ahead.”
To boost sales, Target said this spring that it would slash the price of bread, coffee, diapers and thousands of other everyday items, joining other retailers looking to kickstart business by catering to inflation-weary consumers.
Target is cutting its prices because “consumers are feeling pressured to make the most of their budget,” executive vice president Rick Gomez said in a statement at the time.
The Minnesota-based retailer is also rolling out programs to make shopping easier as it goes head-to-head with Walmart and Amazon.com.
Target announced a paid membership program in April called Target Circle 360, which comes with unlimited free same-day delivery for orders over $35 and free two-day shipping for all orders. The annual $99 per year membership is getting a strong reception, with more than 2 million memberships added in the second quarter.
Target also has been expanding its store label brands and now has 45, including Figment, a kitchenware collection launched last year.
Target earned $1.19 billion, or $2.57 per share during the quarter, edging out Wall Street expectations by a penny, according to a survey of industry analysts by FactSet. That compared with $835 million, or $1.80 per share, last year.
Sales rose nearly 3% to $25.45 billion, slightly better than expected. But even as the number of transactions rose during the latest quarter, the average amount spent by customers fell, underscoring how Americans remain focused on deals, company executives said.
Target now expects per-share annual earnings to range between $9 and $9.70. That’s up from a previous forecast range from $8.60 to $9.60. Analysts expected $9.23 per share, according to FactSet.
TRENTON, N.J. — Democratic Newark City Council President LaMonica McIver has defeated Republican small businessman Carmen Bucco in a contest in New Jersey’s 10th Congressional District that opened up because of the death of Rep. Donald Payne Jr. in April.
McIver will serve out the remainder of Payne’s term, which ends in January. She and Bucco will face a rematch on the November ballot for the full term.
McIver said in a statement Wednesday that she stands on the “shoulders of giants,” naming Payne as chief among them.
She cast ahead to the November election, saying the right to make reproductive health choices was on the ballot as well as whether the economy should benefit the wealthy or “hard working Americans.”
“I will fight because the purpose of politics and the purpose of our vote is to give the people of our communities and our nation a bold voice,” she said.
Bucco congratulated McIver on the victory in a statement but said he’s looking forward to the rematch in November.
“I am not going anywhere,” he said in an email. “We still have a second chance to make district 10 great again!”
Who are LaMonica McIver and Carmen Bucco?
McIver emerged as the Democratic candidate in a crowded field in the July special election. A member of the city council of New Jersey’s biggest city since 2018, she also worked for Montclair Public Schools as a personnel director and plans to focus on affordability, infrastructure, abortion rights and “protecting our democracy,” she told The Associated Press earlier this summer.
Bucco describes himself on his campaign website as a small-business owner influenced by his upbringing in the foster system. He lists support for law enforcement and ending corruption as top issues.
The 10th District lies in a heavily Democratic and majority-Black region of northern New Jersey. Republicans are outnumbered by more than 6 to 1.
It’s been a volatile year for Democrats in New Jersey, where the party dominates state government and the congressional delegation.
Among the developments were the conviction on federal bribery charges of U.S. Sen. Bob Menendez, who has denied the charges, and the demise of the so-called county party line — a system in which local political leaders give their preferred candidates favorable position on the primary ballot.
Democratic Rep. Andy Kim, who’s running for Menendez’s seat, and other Democrats brought a federal lawsuit challenging the practice as part of his campaign to oust Menendez, who has resigned since his conviction.
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Sean “Diddy” Combs at same Brooklyn detention center that held R. Kelly, Sam Bankman-Fried, other high-profile inmates
A second judge refused to grant bail to Sean “Diddy” Combs on Wednesday and he could remain in federal custody at a Brooklyn detention center until his trial for sex trafficking charges. Combs joins other high-profile inmates, such as singer R. Kelly, fallen cryptocurrency mogul Sam Bankman-Fried, rapper Ja Rule —even Al Sharpton served a brief stint— who were held at the same federal detention center.
Notorious for its horrible conditions —inmates won a $10 million class action settlement after enduring frigid conditions during an 8-day blackout in 2019— the waterfront industrial complex, MDC Brooklyn, houses 1,200 inmates.
JOHANNES EISELE/AFP via Getty Images
Violence and corruption have long plagued the facility; U.S. District Judge Gary R. Brown of the Eastern District of New York wrote the detention center had “dangerous, barbaric conditions” in a recent sentencing opinion. Two inmates were stabbed to death in recent months and several correction officers have been convicted for smuggling contraband and accepting bribes.
Combs joins a list of high-profile personalities that have landed at the MDC Brooklyn, partly because the city’s other federal detention center, MDC New York, closed in 2021, also due to horrible conditions. The disgraced financier Jeffrey Epstein died by suicide in his cell there in 2019. “Numerous and serious” instances of misconduct among corrections staff gave Epstein the opportunity to kill himself, a subsequent federal watchdog investigation found.
Kelly sued the federal detention center in 2022 for wrongly putting him on suicide watch after his sentencing. Kelly sought $100 million because he said the detention center knew he wasn’t suicidal after he was convicted in 2021 for racketeering and violating the Mann Act, which bars transporting people across state lines for prostitution.
Yuki Iwamura/Bloomberg via Getty Images
Former crypto billionaire Bankman-Fried survived on bread, water and sometimes peanut butter when he was in the MDC Brooklyn, his attorney said, because the detention center continued to serve him a “flesh diet” despite requests for vegan dishes.
Ja Rule stayed at the MDC Brooklyn for a brief time before being released after serving most of his two-year sentence for illegal gun possession. Most of his prison time was spent in a state prison in New York.
Sharpton served a 90-day sentence in 2001 and went on a hunger strike for protesting the U.S. Navy bombing of the island of Vieques, in Puerto Rico.
Combs was taken into custody on Monday and according to an indictment unsealed Tuesday he was charged with sex trafficking, racketeering conspiracy and transportation to engage in prostitution.
His attorney Marc Agnifilo told CBS News, “It’s impossible to prepare for a trial from where he is,” after a first federal judge denied Combs bail on Tuesday.
U.S. Magistrate Judge Robyn Tarnofsky agreed with prosecutors who argued the hip-hop mogul, who is accused of using his business empire as a criminal enterprise to conceal his alleged abuse of women, is a flight risk and poses an ongoing threat to the safety of the community.
Agnifilo said the part of the detention center where Combs is being held is “a very difficult place to be.”
contributed to this report.
