Target CEO credits canceled vacations, not stimulus checks, for blowout quarter

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Goal CEO Brian Cornell mentioned he’d prefer to see Congress strike a stimulus deal, however he credited closed film theaters and canceled summer season holidays for driving spending throughout the retailer’s blowout quarter throughout the coronavirus pandemic.

The lockdowns throughout the U.S. that pressured shoppers inside additionally despatched them to its retailer and web site to buy, Cornell mentioned on CNBC’s “Squawk Field” on Wednesday. Some found Goal’s e-commerce providers, akin to curbside pickup, or house supply service Shipt — which have been able to go throughout the pandemic due to the retailer’s investments through the years, he mentioned.

“Within the pandemic, we’re not going to eating places, we’re not going to motion pictures,” he mentioned. “These conventional summer season journeys have been canceled. We’re not on planes. We’re not spending {dollars} on lodging, so lots of these {dollars} have been redirected into retail.”

Goal posted eye-popping numbers Wednesday because it reported its fiscal second quarter. Goal’s gross sales on-line and at shops open for not less than a 12 months climbed by 24.3% throughout the quarter ended Aug. 1 — an all-time excessive for the retailer.

On Tuesday, big-box competitor Walmart mentioned it obtained a bounce from stimulus checks in its fiscal second quarter. It mentioned spending tapered off in July as consumers had spent that cash. 

Cornell mentioned Goal attracted new clients and gained market share — particularly with its on-line choices. It attracted 10 million new digital clients and $5 billion in market share within the first half of the 12 months. Some its rivals that promote house decor and attire have been pressured to close throughout the pandemic, however Goal might preserve shops open as an important retailer.

Cornell did, nevertheless, encourage lawmakers’ approval of further support for shoppers.

“It is essential the Home and Senate come collectively and put ahead a brand new stimulus plan,” he mentioned.

The stimulus invoice would assist give shoppers and companies a little bit extra certainty in a troublesome time, he mentioned.

“There’s simply a lot uncertainty as we speak — what is going on to occur with the pandemic, what’s taking place with flu season — as we go into the autumn, questions concerning the financial system and the brand new stimulus, can we return to high school and again to school,” he mentioned. “So we higher make sure that we’re adjusting to this atmosphere and adjusting each week. … It is exhausting to know what is going on to occur subsequent week, not to mention three or 4 months from now.”

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