When you go to a baseball game and someone hits a grand slam you are on your feet cheering. When you watch a pro basketball game and your team is about to win its fourth game of the series, you stand up and sing nah nah nah nah, nah nah nah, hey hey goodbye. And when you go to the opera and it's a boffo performance you jump up and shout bravo.
I am doing all of those things for CEO Brian Cornell and his amazing team at Target (TGT) because the quarter reported this morning, one with 4.8% comparable store growth with digital sales up 42% adding 2.1% to the comp level, is nothing short of astounding. In an era where we are getting used to disappointments so severe that you get down 10% stock moves, as we have seen with the normally reliable Kohl's (KSS) and the inherently unreliable Nordstrom (JWN) , Target has figured out how to beat everyone from Walmart (WMT) to Amazon (AMZN) to everyone in and outside the mall.
Target did this by offering lots of same day, lots of bargain two day all from its 1500 stores that are built around the phenomenal Shipt service, a company they bought a year and a half ago for $550 million in cash. In more than 250 markets you can order from Target though the Shipt personal shopping service and have your order delivered to your front door, your kitchen table, or, as COO John Mulligan said on the call, even your refrigerator and do so in only an hour or two. The service costs $99 a year and I think that you can argue it's a better deal than Amazon prime. The company also lets you order on a digital device and it will hand you the order at all 1851 stores. They will walk the order out to the parking lot in 1250 stores. No fees. As someone who hates going in the store for groceries but knows exactly what I want, this is a godsend. It's clear that Target's decision to make its stores the centerpiece of its fulfillment, while gutsy, has turned out to be a terrific long-term choice with spot on viability.
The best thing about these sales numbers? They are being done by having a boost in traffic. We have seen many a store tell us that the weather was not s conducive to good sales. We have seen others tell us that there were issues involving seasonal items that were hurt by the rain.
We hear almost none of that from Target. In fact, I felt that if Target could be up this much with lousy weather, who knows how it could do with bright blue skies. Plus, the darned place is fun again. Wherever I go I always hope there is a Target, especially the small format ones. You know I was in an Amazon GO store when I was in San Francisco recently, one with no cashier, and there was terrific novelty to it but I like to go into the new Targets to see what they have. It is more than just a curiosity.
I want to let Brian Cornell have the last word: "To get to where we are today, we decided to make some bold changes over the last couple of years but I want to emphasize something important about those decisions. When we made them we explicitly focused on taking a different path than our competition. We said we would open stores when others were closing them. We said we'd invest billions of dollars in our shopping experience and our team when others were pulling back. We said we would use our stores as digital hubs because it delivers speed and convenience for our guests and it aligns with our digital strategy. We said we'd invest in differentiation when others were simply looking for scale. And we said we'd maintain our balanced multi-category assortment, one that's unique in U.S. retail."
And then to ram home the point he said: "We're not trying to be like everyone else. At Target we perform best when we're pursuing our own path not when we are chasing someone else. And our first quarter performance is a clear example of the benefit of that approach."
And to that I say, "Bravo, Brian," and I sing "nah nah nah nah, hey hey goodbye" to everyone else.