January 10, 2019 / 11:48 AM / 4 months ago

Target posts strong holiday sales, maintains outlook

(Reuters) - Target Corp (TGT.N) said on Thursday comparable sales grew 5.7 percent during November and December, helped by higher customer visits and strong online sales during the holiday season.

FILE PHOTO: A Target shopping cart is seen in front of a store logo in Azusa, California U.S. November 16, 2017. REUTERS/Lucy Nicholson

Still, its shares fell over 1 percent in premarket trading, hurt by a disappointing performance at rival Kohl’s Corp (KSS.N), analysts said. Kohl’s shares were down 5.4 percent in premarket trading after reporting anemic comparable sales growth of 1.2 percent during the final two months of 2018, from 6.9 percent a year earlier.

Target expects same-store sales growth of about 5 percent for the fourth quarter through January, while comparable sales had grown 3.4 percent in the November-December period last year.

All of the retailer’s core categories grew during the holiday season, with toys, baby and seasonal gift items being the strongest.

Target reaffirmed its full-year earnings and sales forecast, putting it on track for the strongest full-year comparable sales growth since 2005.

“Target’s sales performance... is an early indicator that the consumer was willing and able to spend this holiday,” said Moody’s retail analyst Charlie O’Shea.

The robust sales numbers indicate consumer confidence has largely not been impacted by rising market volatility due to concerns over slowing global growth and a political deadlock in Washington.

Target said store pickup and drive-up surged more than 60 percent from a year ago, and accounted for a quarter of the company’s digital sales in the holiday period.

The retailer also expects 2018 to be the fifth consecutive year in which its online sales grew more than 25 percent.

The company said Chief Financial Officer Cathy Smith plans to retire and would continue in her role until a successor is named.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta and Bernadette Baum

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