Target’s heavy discounting during the crucial holiday season squeezed fourth-quarter profits. But its trendy assortments and spiffed up presentations induced shoppers to spend more. The company, based in Minneapolis, also offered an upbeat outlook, sending shares more than 3 percent higher.
The results show Target has made solid progress in reinvigorating its business and winning back shoppers. It initiated an aggressive plan to regain its cheap chic status in 2014 under new CEO Brian Cornell after a series of headline grabbing setbacks, including a major debit and credit card breach that hurt sales and profits for months.
Under Cornell, the company got rid of its
money-losing Canadian operations and it shook up its leadership ranks.
During the recession the company appeared to lose its mojo when its focus shifted to an expanded grocery section. It seemed slower in getting ahead of style trends then it had in the past.This past holiday season, Target battled it out with Wal-Mart and online leader Amazon.com, heavily discounting goods, and brought back free shipping online. Traffic in stores rose and online sales surged 34 percent, after online sales jumped 30 percent in the quarter before.
The maneuvers helped drive comparable-store sales up by 1.9 percent, the sixth consecutive quarterly