Target CEO: We are a growth company and will continue to grow in 2022 (NYSE:TGT)
Target CEO Brian Cornell said Tuesday that the retailer’s recent Street-beating earnings figure points to further growth for the company, as it looks to leverage efficiency earned through its store-as-hub model.
“We are a growth company and we’ll continue to grow in 2022 and beyond,” the chairman and CEO of Target (NYSE:TGT) told CNBC.
Target (TGT) soared 12% in Tuesday’s early trading following the release of its quarterly results. The company topped projections for its Q4 profit, with comparable sales rising 8.9% during the crucial holiday quarter.
The advance in comparable sales followed a nearly 21% jump experienced a year ago. TGT also revealed that digital sales climbed 9.2% during the most recent quarter.
Cornell reported that the growth fueled by the pandemic has given it added scale, which it can use to drive better efficiency. At the same time, the company has seen growth at the store level, as digital sales growth has trickled down to individual locations, thanks to its store-as-hub model.
“Over the last couple of years, the average Target store has added $15 million in sales,” he noted.
Cornell added that the firm plans to invest in further growth, raising its capital expenditure budget as a way to fuel further sales increases. He reported that this spending would be targeted at store openings, store remodeling and capacity expansion.
“We’re just going to be a company that’s investing in the future, investing in growth, but we’ll reward shareholders along the way,” he said.
Bolstered by the earnings news, TGT advanced $23.52 at about 9:45 a.m. ET, climbing to $222.29. The advance recovered a portion of the losses posted last month, as the stock came further off an 11-month low reached last week.
The stock is now on track for its highest close since mid-January.
For more on TGT’s long-term prospects, check out a deep dive from SA contributor Daniel Schönberger, who assessed before the earnings release that the stock had become undervalued.
