Target announced yesterday its second-quarter 2019 performance, including comparable sales growth of 3.4% driven by a 2.4% increase in comparable traffic. The retailer reported GAAP earnings per share (EPS) from continuing operations of $1.82 in second quarter 2019, up 22.0% from $1.49 in second-quarter 2018. Second-quarter Adjusted EPS of $1.82 was 23.9% higher than $1.47 in second-quarter 2018. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.
Brian Cornell, chairman and CEO of Target, said “We are really pleased with our second-quarter performance, which demonstrates the strength of our strategy and the durable financial model we’ve built over the last several years. By appealing to shoppers through a compelling assortment, a suite of convenience-driven fulfillment options, competitive prices and an enjoyable shopping experience, we’re increasing Target’s relevancy and deepening the relationship between our guests and our brand. Traffic and sales continue to grow while our EPS reached an all-time high, driven by the strength of our team’s execution and their focus on delivering for our guests. Because of our outstanding performance in the first half of the year and our confidence moving forward, we are increasing our guidance for full-year earnings per share.”
For both the third quarter and second half of 2019, Target expects comparable sales growth in line with the 3.4% comparable sales growth the company delivered in the second quarter of 2019.
As has become the norm at Target over the last few years Private Brand was an important subject during corresponding Q2 2019 Earnings Call.
Brian Cornell, chairman and CEO of Target, addressed their latest private brand launch in fashion:
“Within our product assortment, we continue to focus on providing a unique combination of quality, fashion and value across our owned, exclusive and national brands. Just ahead of the back-to-school season, we launched our new multi-category own brand, More Than Magic, which our team developed to appeal to guests in their tween years.”
And went on to discuss the anniversary of the Designer collaborations as well as the debut of Good & Gather. “We’re excited this quarter to be bringing back hundreds of items from 20 different designers to celebrate the 20th anniversary of Target’s first designer partnership. And just this week, we announced our newest own brand in food and beverage, Good & Gather, which our team designed to make it easy for families to discover the joy of food.”
Mark Tritton, Executive Vice President and Chief Merchandising Officer later presented more color on More than Magic.
Strategically planned right before the back-to-school season, we launched our newest own brand, More than Magic, which is a complete lifestyle brand spanning sportswear, dancewear and gymnastics apparel, jewelry, accessories, beauty, electronics and even stationery. Our team develop this brand to appeal to tween girls who are looking to move beyond Cat & Jack, but aren’t quite ready to move up to our juniors’ assortment and brands like Wild Fable.
Central to the More than Magic brand is the theme of empowerment through positive messaging on products like apparel and notebooks. In addition, based on feedback we received from both tweens and their parents, all the beauty products in this new brand are made with our parabens and won’t [Phonetic] tested on animals. We’re really excited to launch this new branded at a time when many mall-based alternatives are closing their doors and we’ve been very pleased with the early results since the launch. And as we look ahead, we’re really excited about our plans for the third quarter where we continue to invest in newness across both our owned and national brand assortments.”
As well as Good & Gather.
“And finally, the food and beverage team is looking forward to the upcoming launch of our new own brand, Good & Gather, which we just announced earlier this week. We know that food and beverage is a big reason our guests like shopping at Target since nearly three-quarters of our baskets have at least one food item in them. And driven by the improvements we’ve implemented over the last few [Phonetic] years, we’ve been seeing consistent growth and market share gains in food and beverage for well over a year.
To build on this momentum, it’s critical that our approach to every aspect of our food offering from selection to presentation brings joy to our guest lives. So in developing this brand, the product design and development team was focused on delivering taste, quality and ease. And importantly, the entire assortment is made without artificial flavors, synthetic colors, artificial sweeteners and high fructose corn syrup, helping our guests to feel confident they are serving their families affordable great tasting food that doesn’t cut corners on quality ingredients.
Good & Gather will become Target’s flagship food brand with extensions focused on kids, organic and signature product lines. It will launch with over 650 items from dairy to produce, ready-made pastas and meats, to granola bars and sparkling water. And by the full set next year, it will be 2000-plus products strong. It will launch in all Target stores and on Target.com, the same-day delivery beginning on September 15.”