Why your local Target store may look very different soon
Target’s ambitious store remodeling campaign that began in 2017 is far from over.
The discount retailer said during a presentation to analysts Tuesday that it will remodel 300 stores in 2019 and another 300 in 2020. Target remodeled 400 locations between 2017 and 2018 as part of a $7 billion capital investment plan unveiled in 2017.
Target’s remodels are generally focused on spiffing up the look of its important grocery, electronics, apparel and cosmetics departments. Further, the remodels often include expanded space allocated to each of those categories. Other focal points include designated online pickup spots in stores and warmer store fronts.
Some have even included slicker looking Starbucks locations, which are often found at the front of Target stores.
Target’s remodeling efforts appear to be paying dividends.
Target’s fourth-quarter results and full-year outlook were well received by the market. The company’s fourth-quarter same-store sales rose 5.3%, ahead of Wall Street estimates for a 5.1% increase, spurred mostly by an improvement in customer traffic to Target stores. Online sales surged 31% from the prior year.
Earnings of $1.53 a share came in line with analyst forecasts.
For 2019, Target sees earnings in a range of $5.75 to $6.05 a share. Wall Street was looking for $5.64 a share. Same-store sales are expected to increase by a mid-single-digit percentage.
“An encouraging fiscal year 2019 [earnings] guide, with stabilizing EBIT [profit margin], along with a strong finish to fiscal year 2018, leaves us optimistic about Target’s growth strategy and more confident in their ability to compete [with] other mass retailers,” says Jefferies analyst Christopher Mandeville.
Target shares rose as much as 6% in early trading Tuesday.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi
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