Please ensure Javascript is enabled for purposes of website accessibility

Target Reports a 20%-Plus Rise in Comparable-Store Sales Month-to-Date

By Eric Volkman - Mar 25, 2020 at 6:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

That was the good news for the big retailer, but there were also some not-so-good developments.

Target (TGT 2.34%) released a business update Wednesday that indicated a dramatic uptick in sales. In the press release intended to keep investors and other parties abreast of developments at the big retailer in the face of the COVID-19 coronavirus pandemic, the company revealed that its comparable-store sales have risen by more than 20% year over year so far in March.

This is an extremely high number for an established retailer. For comparison's sake, Target's comps dating from the fourth week of February through the front end of March (when the first stirrings of the coronavirus scare were felt in the U.S.) came in at 3.8%.

Interior of a Target store.

Image source: Target

That 20%-plus rise is due to Target shoppers stocking up on groceries during the coronavirus threat and the stay-at-home measures it has triggered in many municipalities. The company said that comps in its essentials and food & beverage segment have increased by over 50% this month.

This performance won't necessarily shake out in widened profit margins, Target warned. "[S]tronger-than-anticipated quarter-to-date sales have led to gross margin dollar growth ahead of prior expectations," the company wrote in its update. "However, continued sales declines in higher-margin discretionary categories could result in lower-than-expected gross margin dollar performance for the remainder of the quarter."

Meanwhile, due to the great uncertainty over how the pandemic will play out, Target has withdrawn its sales, operating income, and earnings guidance for both the current quarter and for the entirety of 2020. It is also halting its share repurchases for now.

Investors might be focusing more on these negatives when approaching the high-profile consumer goods stock. Target's shares fell by over 9% on Wednesday, in sharp contrast to the gains of the wider market.

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Target Corporation Stock Quote
Target Corporation
TGT
$145.71 (2.34%) $3.33

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.