Yesterday (August 19, 2020) Minneapolis based Target held its Q2 2020 Target Corp Earnings Call, a call in which the retailer reported “exceptional” results and remarkable private brand growth. In transcripts from the call Chairman & CEO, Brian Cornell reports
“Thanks, John, and good morning, everyone. Today, we’re sharing second-quarter results that are, by virtually any measure, exceptional. But I want to say at the outset that what’s most extraordinary of all is the environment in which we generated those results. The incredible resilience of our team, the way they’ve risen first to the pandemic, then to social trauma touched off in May here in Minneapolis is unlike anything I’ve seen or I’m likely to see again in my career. And I say in all humility that it has been a huge privilege to work alongside this team in this moment.
The results we reported this morning are truly unprecedented. On the top line, we delivered second-quarter comparable sales growth of 24.3%, the strongest we’ve ever reported. Equally remarkable on the bottom line, we generated adjusted EPS of $3.38, a new record high and strong enough to offset the significant profit headwind we faced in the first quarter. These results are a testament to our team and their passion for our guests and the increasing trust our guests are placing in our brand.”
He went on the elaborate.
“Across all 5 of our core merchandising categories, we delivered very strong share gains in the quarter, driven by the acceleration in our discretionary businesses, combined with continued strength in our frequency categories. We mentioned in the first quarter that we had already gained a year’s worth of market share in the quarter alone. Rather than slowing down, our share gains accelerated in the second quarter, and we gained double the dollars compared with the first quarter, bringing our year-to-date share gains to more than $5 billion.”
And then later to focus on private brand and the dramatic reinvention of Good & Gather as well as the portfolio of fashion private brands.
“The Good & Gather brand is clearly resonating with our guests and delivering on our Food & Beverage vision to enhance the Target experience by making it easy for families to discover the joy of food. We launched this new flagship brand less than a year ago, and it has already generated more than $1 billion in sales. With the momentum from this new brand, our own-brand Food & Beverage business has been growing more than 30% so far this year, significantly outpacing the market and growing market share.
Beyond Good & Gather, we continue to benefit from an unmatched portfolio of owned and exclusive brands that spans our entire assortment. Together, these brands whose sales have outgrown national brands so far this year, offer guests quality and style at an unmatched value while enhancing Target’s differentiation and delivering attractive gross margin rates.
In June, we launched Casaluna, a collection of more than 700 quality bedding and bath items featuring elevated natural and sustainable materials like linen, hemp, silk, cashmere, all at an amazing value. And of course, it was only in January that we launched our new activewear brand, All in Motion, and the timing couldn’t have been better. All in Motion was designed with a commitment to quality, sustainability and inclusivity at incredible Target prices. As guests across the country have moved to working from home, they embraced the quality, comfort and value provided by this new brand, driving sales well beyond our original expectations.”
He closed optimistically with a challenge for the future, “To meet those ever-changing needs, we’ll need to continue to reinvent ourselves, changing our operations”
“As in every upward journey, our progress over the last 5 years has not been a straight line. Along the way, we reached some plateaus and sometimes even lost some altitude before resuming the climb. That’s why it’s sometimes helpful to look back over a longer distance to get a true picture of the progress.
But unlike the ascent of a mountain, our journey will not end up with a climb back down. Success will be defined by further growth with a constant eye on what consumers want and need. To meet those ever-changing needs, we’ll need to continue to reinvent ourselves, changing our operations along the way.
Yet, some things will sustain over the longer term, like our culture, values and our team’s commitment to one another. These strengths have defined this great company for decades, and our commitment to maintaining them has never been stronger.”