Driving store traffic and sales continue to be major...
Driving store traffic and sales continue to be major challenges for Target, as the company reported Q1 sales for the quarter ended May 1 of $15.6 billion, up 2.8 percent from $15.2 billion in Q1 2010, CEO Gregg Steinhafel said…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
in an earnings call Wednesday. Profit inched up 2.7 percent to $689 million. “Unusually strong profit” in the company’s credit card segment offset “softer than expected” sales, Steinhafel said, citing “economic headwinds” and high gas prices as factors that keep minimizing traffic in the stores. Steinhafel said the company’s non-discretionary business including food, beauty and health was solid, but it “struggled” in sales of electronics, movies and music and seasonal categories. To help drive sales of electronics and packaged media, the company created partnerships with singers Jennifer Hudson and Allison Crowe involving deluxe-edition CDs with additional content available only at Target. With the release of the movie Cars 2 in June, Target is planning themed marketing across various platforms including bedding, sleepwear and toys, according to Executive Vice President of Merchandising Kathryn Tesija. Overall for the quarter, Target expected to drive stronger top-line sales, Steinhafel said, “and we're disappointed that we didn’t deliver on that. We have to do better broadly across the store,” he said. Regarding the company’s recently launched trade-in program at its mobile locations, which allows customers to trade in electronics for store credit, Tesija said it is in 1,300 stores today and will be in 1,490 stores by the end of June. She said the company is pleased with results following the launch of My Target Tech, a free customer support service that’s resulted in a drop in product returns. The company opened six new stores in March, including one re-location, and expects to open 15 to 20 new stores in its current format in 2012 and will “slowly ramp up the pace” in following years, Steinhafel said. Target is on track to launch a new small urban format called City Target and expects to open five locations in four markets in 2012, Steinhafel said. The stores will be custom-designed to meet the appeal of local regions, he said. Target’s Canada expansion continues to move forward with plans to open 100-150 stores in 2013 and 2014 and “likely more than 200” stores over the next 10 years, he said. The company is preparing for the 2011 launch of its new online platform that’s “on-time and on-budget,” he said.