Target named Company of the Year by Yahoo Finance
Target, or as it’s affectionally known as Tar-jay by its loyal patrons, has been named Company of the Year 2019 by Yahoo Finance.
Strong in-store sales, surging online volumes, earnings day blowouts and a skyrocketing stock price all contributed to Target being credited with this title.
Despite some unfruitful investments and tough competition from Amazon and Walmart, Target has survived with profit margins suddenly touching the sky.
“Obviously, there were some doubters out there a few years back,” Target CEO Brian Cornell tells Yahoo Finance. “But to see people put Target back in the winner’s circle, this iconic American retail brand, I take a lot of pride in the work the team’s done. And it’s certainly gratifying to see the progress that we’ve made.”
In 2017, Target closed on a rough holiday season with sales falling 1.5 percent. This led the stock to drop by 28 percent in the past year. However, Cornell was determined for Target to survive.
His plan included remodeling more than 1000 stores, opening of 30 small stores a year in urban areas dominated by CVS and Walgreens, retraining of employees and having a new staffing model for shipping online orders from the stores.
Additionally, an overhauled website, mobile app and rewards program was also launched.
The plan saw Target’s condition improving in 2018 with sales rising by 5.1 percent and online sales spiking by 49 percent.
Now, since the spring of this year, Target’s earnings release days have only gotten that much better and so has its stock price.
“What has been most impressive — and where we have been positively surprised — is just on how strong they have grown their EBITDA [operating profits],” Deutsche Bank’s veteran retail analyst Paul Trussell says. “Margins have been phenomenal this year. Even when you write all of these initiatives down, that would rarely translate into double-digit growth in operating income let alone the 20%-plus we saw in the third quarter. So that is the biggest positive surprise.”
The unfolding dream for Target is unlikely to end in 2020, experts tell Yahoo Finance. Target should enter 2020 with considerable sales momentum across its stores and online businesses.
“Target dominated the retail discussion in 2019. Big sales gains each quarter. Blowout earnings releases. A surging stock price. And completely transformed stores across the United States,” added Yahoo Finance editor-at-large and anchor Brian Sozzi. “What Target proved to investors in 2019 is that it will be a force to be reckoned with in the new age of retail for years to come.”