Target (NYSE: TGT) announced Thursday that its goal is to invest USD4 Billion annually for the next several years, in its ongoing growth. The money would be used to hasten the opening of new stores, remodel existing locations and perfect its online delivery service.
Target sales grew USD15 Billion during 2020, surpassing that of the last 11 years combined, as the company became a favorite throughout the coronavirus pandemic.
The company’s fourth quarter was an astonishing success with revenue growing 21% to USD28 Billion. Furthermore, comparable sales rose over 20%, impulsed by a 118% jump in digital sales, according to Target. Net earnings increased 65.5% to USD1.38 Billion, or USD2.73 per share.
“Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020, as our guests turned to Target to safely provide for their families throughout the pandemic,” said Brian Cornell, Target’s chief executive, in a statement.
Nevertheless, the company did not provide an outlook for the year, explaining that the current pandemic made it impossible to foresee consumer spending habits. Shares fell almost 5% Tuesday, despite its positive earnings report.
According to Cornell, Target’s recent growth wasn’t due to the pandemic but its long-term business strategy. Cornell highlighted its growing collection of private-label brands and it’s various partnerships with popular national brands.
“Far from being a fluke, this performance is further proof that we built a business model that is working as intended, one that puts Target in a category of its own,” Cornell said.
Cornell continued on to assure investors that uncertainty would not deter the company in the near future.
“I recognize the frustration, not being more precise, particularly on the top line as we think about sales, but I can guarantee you our entire leadership team and every part of this organization is focused on retaining and growing market share, no matter what the variables are we have to face,” Cornell said.