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Major retailers, including Amazon.com (NASDAQ:AMZN), Walmart (NYSE:WMT) and Target, have launched sooner-than-usual promotional deals ahead of the holiday season as demand for seasonal items soars and companies look to limit the damage from shipping logjams and other supply problems.
Target said its inventory levels were up more than $2 billion, or a near 20% jump from a year earlier, as it tries to cushion the impact of supply-chain disruptions, which have led to empty shelves and delayed shipments at many retailers.
“We are ready for the holiday season … (Customers) have eagerly started their holiday shopping,” Chief Executive Officer Brian Cornell said.
Comparable sales rose 12.7% in the third quarter ended Oct. 30, beating expectations of 8.4%, according to IBES data from Refinitiv, with almost all of that growth coming from stores.
Store traffic jumped nearly 13% as Target held on to shoppers by offering lower prices on goods at a time when inflation has been soaring and with quick same-day delivery services such as Shipt and Drive-Up.
The company now expects annual same-store sales to rise in the range of high single to low double digits, up from its prior forecast of a high single-digit increase. It, however, maintained its operating margin forecast.
Target like rival Walmart also reported a margin hit, as its gross margin fell to 28% in the latest quarter from 30.6% a year earlier on higher labor and freight costs.
Target’s total revenue rose by a better-than-expected 13.3% to $25.65 billion. Excluding items, it earned $3.03 per share.
