Target slashed prices. It paid off
CNN
Target’s sales rose for the first time in a year, snapping a big losing streak. It’s the latest sign US consumers are still spending at stores – as long as shoppers believe those stores are offering good value.
Target’s sales rose for the first time in a year, snapping a big losing streak. It’s the latest sign US consumers are still spending at stores – as long as shoppers believe those stores are offering good value. Target’s sales at stores open at least one year increased 2% last quarter, and its profit boomed 36%. The company’s stock (TGT) surged 13% in premarket trading. Target was boosted by price cuts. The company slashed prices on 5,000 frequently bought items at stores to draw customers. That strategy worked. Foot traffic to Target’s stores increased 3% during the quarter, and shoppers spent on discretionary products like clothing. “Consumers are showing resiliency as they continue to search for value and focus on essentials, while selectively spending on discretionary items,” Joseph Feldman, an analyst at Telsey Advisory Group, said in a recent note to clients. Still, Target signaled a cautious outlook for the rest of the year, a sign it expects consumers to spend carefully. Target expects sales to rise by up to 2% this year but said it would likely come in lower than that. Target’s sales increase last quarter snaps four consecutive quarters of declining sales for the chain.