Target
An earnings beat is always something to be proud of. Still, Target should be especially proud of its earnings for the last quarter, considering that it helped drive sales so much that Target's 2020 performance outdid the previous 11 years combined. Analysts projected earnings per share of $2.54, a 50% rise YTD, with sales in the ballpark of $27.5 billion. When the results came in, Target reported EPS of $2.67, which was up 58% YTD.
"Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020," CEO Brian Cornell said.
The Coronavirus Pandemic's sudden intensification caused a massive, seemingly inescapable disruption to most retailers' day-to-day operations. Stay-at-home orders and the fear of contracting COVID-19 drove down in-store traffic but caused an enormous spike in ecommerce traffic that properly equipped firms were able to capitalize on.
The trend towards ecommerce by most consumers was rapidly escalated by the pandemic. Even as foot traffic picks up, retailers are finding that both ecommerce and hybrid "curbside pickup" models are still popular with customers. Target was already capitalizing on the trend towards ecommerce, but after Target's success in 2020, CFO Michael Fiddelke is increasing its investment in ecommerce.
"If you go back a decade, we thought about digital wrong," he said. "We didn't invest enough because the margins didn't look good."
Target's hybrid model of allowing customers in stores while offering curbside pickup and in-store pickup, as well as home delivery, helped the company not only stay profitable during the pandemic but deliver it a landmark year. Yet, Target still hasn't issued any guidance on 2021, mostly because the company, like other retailers, isn't sure what to make of the near future.
"The crystal balls are still a bit cloudy depending on how the year plays out," Michael Fiddelke commented. The wide field of variables, from vaccine distribution to how the pandemic has changed spending habits, makes it hard to say with certainty where Americans will find themselves in a few months and how that will affect their spending.