Target released their earnings report today for the three–month period ended August 1, 2020. Comparing Q2 2019 to Q2 2020, this quarter was a resounding success for Target. Notable highlights include:
- Second quarter sales grew 24.3% year-over-year (YoY), the highest Target has ever reported, with digital sales contributing 13.4 percentage points and store sales contributing 10.9 percentage points
- Digital sales grew 195% YoY
- 17.2% of total sales from the second quarter originated online
- Total revenue grew 24.7% YoY, from $18.4B to $23B
- Operating income grew 73.8% YoY
- Same-day services for Q2 grew 273% YoY
- Target gained $5B in market share in the first six months of 2020, exceeding gains made in all of 2019
Key Takeaways for Online Sellers
In February, eMarketer forecasted that Target would finally break into the top 10 US ecommerce retailers, capturing 1.2% of total retail ecommerce sales in the US. EMarketer also predicted that Target’s ecommerce business will grow to $8.34 billion. Target’s second quarter earnings report supports this prediction.
In the six months preceding August 1, 2020, digital accounted for 16.3% of Target’s sales. In that same period, Target reported $42 billion in sales, which indicates that they’re nearing $7 billion sales generated through ecommerce.
This is impressive growth, but still trails Walmart, which generated roughly $5.5 billion from ecommerce in Q2 alone, and Amazon, which grew North American net sales to $55 billion in Q2. Brands interested in growing their online business should continue to focus on Amazon and Walmart’s online marketplace, but Target is clearly one to watch.