US general merchandise retailer Target has withdrawn its full-year financial guidance despite “unusually strong traffic and sales” as consumers continue to stock up on essentials such as food and medicine to see them through country-wide lockdowns during the coronavirus outbreak.
The fourth week of February and the first part of March saw an increase in traffic and comparable sales across its multi-category portfolio, while total company comparable sales increased 3.8% in the month of February. But from mid-March, performance softened in apparel and accessories.
In the month-to-date in March, overall comparable sales are up 2% last year. Essentials and food and beverage sales are up more than 50% – but apparel and accessories comps are down more than 20%.
Given the “highly fluid and uncertain outlook” for consumer shopping patterns and government policy related to Covid-19, the company has withdrawn its guidance for first quarter and full-year 2020 sales, operating income and earnings per share.
The retailer is also adjusting the timing of some of its strategic initiatives, including a reduction in its store remodelling programme, down from 300 to 130 remodels in 2020. It will open 15-20 new small-format stores in 2020, down from the 36 previously stated.
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By GlobalData
