Bring on the holiday shopping season, said Target Chairman and CEO Brian Cornell.
"We expect to see a strong and robust holiday season. We have been planning all year for this. I am very proud of how our teams are preparing. We expect our momentum to continue," Cornell said Monday at the Yahoo Finance All Markets Summit.
Target shares rose 2% Monday morning. Shares have gained 47% year-to-date, out-performing the S&P 500's 21% improvement.
Cornell's comments echo a bullish take on the state of the U.S. shopper by Bank of America CEO Brian Moynihan at All Markets Summit.
As for Target, the raw data on its 2021 financial performance suggests it could have yet another impressive holiday season as a rebounding job market and rising wages power consumer spending.
Target's second quarter comparable sales rose 8.9%, fueled by a 12.7% increase in the number of transactions. The average transaction amount fell 3.4% after rising 18.8% last year as consumers stocked up on essentials at the height of the pandemic. Operating profit margins widened to 9.8% from 9.1% a year ago.
For the holiday season, analysts see Target posting a 7% same-store sales increase. Operating margins are pegged to be relatively unchanged per analyst modeling, which would be a win in the current red-hot inflationary environment.
"The [Target] story remains very much intact. That is, Target continues to position itself for “growth on top of growth” as it leans into a myriad of investments to drive sustainable sales increases and market share gains. Target's unwavering focus on customer engagement/service, multi-category/channel merchandising, and value should continue to resonate, driving a sustainably higher level of sales/margins, in our view," said Barclays analyst Karen Short in a research note to clients.