The company’s shares were up after a positive earnings report.
It’s not easy for businesses to compete with online retail giant Amazon but according to analysts at JP Morgan Chase, Target doesn’t have to. Analysts upgraded the stock and raised its target price from $81 to $100.
On Wednesday, Target’s stock went up nearly 10% after delivering a positive first-quarter earnings report. The company’s same-store sales grew 4.8%, beating investor expectations of 4.2%. Target shares are up 17% year-to-date.
And Target’s sales continued to grow even as other retailers like Macy’s reported lagging sales. JP Morgan analyst Christopher Horvers said Target is unlikely to be upstaged by Amazon and instead needs to focus on outperforming retailers like Walmart.
Things to like about Target
The company’s same-store success can largely be attributed to its massive remodeling plan. From 2017 to 2018, Target remodeled more than 400 stores.
During these remodels, the company improved and expanded the grocery, apparel, and electronics departments. And the company even improved the look of the in-store Starbucks locations.
All of these improvements paid off because a nicer looking store encouraged customers to visit more often and spend more money. Target plans to remodel another 300 stores in 2019.
Target’s e-commerce sales grew 42%, thanks in large part to its expanded online order fulfillment options. The company offers free two-day shipping, curbside pickup, and same-day grocery delivery through Shipt. Half of Target’s online sales were same-day delivery options, either through Shipt or curbside pickup.
Target places its stores at the center of its fulfillment strategy, a move that many experts felt was risky. But this strategy clearly seems to be paying off.
Thanks to its digital strategy, the company is still able to provide the convenience customers are looking for. Shipt currently has over 100,000 users so there is a lot of room for future growth.
And drive-up services give customers an added incentive to take trips to Target. Amazon will certainly continue to provide plenty of competition going forward but Target has shown that there is still a strong demand for traditional retailers.