What's going on?
Target lived up to its name on Wednesday: the mega retailer released earnings that hit the mark and its stock darted up 5%. Meanwhile, home improvement retailer Lowe’s earnings were a bit left of center, but still firmly on the board – its stock rose 8%.
What does this mean?
Target – the second-largest department store in the US after Walmart – had its best quarter in a decade. The company’s sales growth in stores open at least a year was its strongest in 13 years – with unprecedented growth in foot traffic at its stores, as well as a 41% rise in digital sales compared to this time last year. As a result, it’s raised its forecast for the rest of the year.
Lowe’s, on the other hand, reported same-store sales that were on the, ahem, low side for the second quarter in a row, missing expectations. However, the retailer managed to beat profit expectations. Lowe’s also announced that it would be undertaking some renovations of its own, closing its Orchard Supply Hardware stores after battling weakening US homebuilding (and Home Depot).
Why should I care?
The bigger picture: Retail’s buzzing.
TJX (owner of TJ Maxx) also had a stellar quarter, crushing expectations and getting down with the millennials. Kohl’s did well, too, reporting both revenue and profit that beat expectations, not to mention Macy’s pace-setting results last week.
For you, personally: Let’s get physical.
Target attributed part of its success over the past year to a strategy change that it rolled out in early 2017: it said that it would pump $7 billion into things like improving its digital operations, remodeling stores, and opening smaller stores in big cities like New York. A multi-pronged attack – and so far it’s paying off. Amazon’s not opening bookshops (yes, real ones) and Go-cery stores for nothing. Looks like it’s not all about the internet – consumers (you guys) seem to value having actual, physical places to visit when you want to, too.