Wilfredo Lee/AP
Target reported $24.5 billion in revenue last quarter, with comparable sales down 3.7%, marking the fourth consecutive quarter of decline. While e-commerce orders returned to growth and improved by 1.4%, it wasn't enough to cover a 4.8% slide for in-store comps.
Unlike total sales, comparable sales exclude new and closed stores, and analysts commonly use the measure to assess the underlying health of the business. In Target's case, the measure reflects only results from locations open for at least 13 months.
Although the company managed to improve profitability last quarter, CEO Brian Cornell told investors on Wednesday that "we won't be satisfied until we see positive comps in the second quarter and over the balance of the year."
Target is now pulling out a number of stops to affect that turnaround, the most recent of which are price cuts on thousands of items that Cornell says will collectively save shoppers millions of dollars this summer.
The company also revamped and expanded its membership program, Target Circle, adding over a million new shoppers during the quarter. It did not specify how many of those were in the paid tier, which offers unlimited free delivery like Walmart+ and Amazon Prime.
Target even tried on some new hats this quarter — wholesaler and exporter — as the company partnered with Canada's Hudson Bay chain to sell the wildly popular Cat and Jack children's clothing line.
While on the subject of private label (own brands, as Target likes to call them), the company expanded its assortment in the budget-minded Dealworthy brand of essentials and invested in improving the quality of its Up and Up line.
Unfortunately for Target, the moves over the past several months haven't resulted in people shopping more often or buying bigger baskets — something the company attributes in large part to inflation-weary consumers and stretched household finances.
Going into the summer, Target faces a tricky balancing act of growing top-line sales through deals and promotions while also keeping profitability in line with investor expectations.
"We're encouraged by the meaningful progress we've seen in recent quarters," Cornell said."These trends reinforce our confidence that we're on the right track and positioned to get back to growth in Q2."
