Last week Target announced its first quarter 2019 performance, including first quarter comparable sales growth of 4.8% driven by a 4.3% increase in comparable traffic.
“Target had an outstanding first quarter, as our team delivered a great experience for our guests and drove strong growth in traffic, comparable sales, operating income and earnings per share,” said Brian Cornell, Chairman and CEO of Target Corporation. “Over the last two years we have made important investments to build a durable operating and financial model that drives consumer relevance and sustainable growth. Target’s first quarter performance and market-share gains demonstrate that the model is working. Throughout this year, we will continue to extend the reach of our same-day fulfillment options, strengthen our portfolio of owned and exclusive brands, remodel and open more stores and invest in our team. We’re confident that we’re well-positioned to deliver strong financial performance in 2019 and beyond.”
Target expects second-quarter comparable sales growth in the low- to mid-single digit range. For full-year 2019, Target continues to expect a low- to mid-single digit increase in comparable sales.
In the Target Q1 2019 Results Earnings Conference Call Brian Cornell, Chairman and Chief Executive Officer discussed private brand at the retailer.
“Our merchandising teams continue to deliver newness through existing brands, while adding new brands to supplement our assortment.
In the first quarter, the team launched three new owned brands, in Intimate Apparel; a new natural owned brand in Essentials; innovative national brands including Flamingo and Welly in personal care; and our new Home brand, Sun Squad to help our guests celebrate the summer season.”
Mark Tritton, Executive Vice President and Chief Merchandising Officer went on to speak at length on their growing private brands.
“…we continue to invest in newness and differentiation, both in existing brands and by launching new ones across our curated assortment.
In the first quarter, we completely transformed our assortment of presentation in intimates and sleepwear and launched three new brands: Auden, Stars Above and Colsie. All of these three new brands are size inclusive and designed to make guests at any age feel confident and comfortable.
In Essentials last month, we launched a new natural owned brand Everspring. This entire line of more than 70 items is made from plants, renewable materials and recycled paper. The packaging includes graphic icons that allowed guest to quickly understand product attributes and what ingredients are not in the formulation.
In fact, all Everspring products qualify for Target Clean, a new symbol we have designed to both simplify and indicate products, formulated without chemical ingredients that guests may want to avoid.
Everspring products were developed by our internal design team and feature carefully selected scent profiles, including citrus and basil. Prices in the assortment range from $2.99 up to $11.99 and the entire assortment on average is priced nearly 20% below comparable products in the marketplace. This new Everspring initiative complements other strong Q1 launches of exclusive to Target’s natural brands, like Flamingo and Wally that Brian mentioned earlier.
In February, we announced that we are introducing toddler sizes into our Art Class brand, which we first launched in 2017. Art Class brings a versatile fashion-forward aesthetic to Kids Apparel and we know that many parents are looking for a diverse range of style and aesthetics for the younger kids as well.”
Tritton went on to discuss the Sun Squad launch.
“And we also recently introduced a new seasonal owned brand Sun Squad to help guests celebrate the pure joy of summer.
Again, developed by our internal design team, this assortment features more than 600 items from pool floats to larger than life sprinklers, beach totes and coolers, designed to encourage families to get outside, create lasting memories and make the most of the summer season. We priced these items to deliver amazing value with some items priced below $2.”
As well as California Roots and Goodfellow in men’s grooming.
“And in Food and Beverage, following the wildly successful launch of our California Roots brand, we recently added the collection to our wine assortment. The collection brand offers high quality wine at affordable price, combined the very best of carefully harvested grapes featuring five premium varietals at $9.99 per bottle.
And last week, we’re excited to announce that we’re introducing men’s grooming items under our Goodfellow & Co brand name. This men’s brand has seen an amazing response since we launched it in the fall of 2017, driving strong market share gains at the men’s apparel assortment.
Given that men are increasingly doing their own shopping for grooming at personal care items, we want to ensure the Target is there destination for those categories. The assortment here features more than 30 products priced between $3.99 to $16.99, and again positioned about 20% lower than comparable men’s premium brand.”