Forget dishes, toasters and school supplies. Target customers are now buying their clothes at the discounter — and lots of it.

Target shares soared 14% after the company reported stellar financial results driven largely by clothing sales.

Sales of sports attire, underwear, dresses and other apparel rose 10 percent during the quarter ended Nov. 2 — even as other clothing retailers like The Gap and Urban Outfitters are suffering from sagging sales. The increase represented a 5-percent jump from the previous quarter, which Chief Financial Officer Michael Fiddelke described as “exceptional.”

He wasn’t just tooting his own horn, either. Wall Street analysts also were impressed by the increase and admitted as much on the earnings call.

“A greater than 10 percent growth in your apparel business probably means you grew more than anybody in the entire United States apparel industry,” gushed Raymond James analyst Matt McClintock.

Shares surged as high as 16 percent in midday trading before closing up 14 percent, to $126.43.

Apparel represents about 20 percent of Target’s sales or about $20 billion, according to Gordon Haskett analyst, Chuck Grom. “When you are up by $2 billion you are probably taking share from everywhere,” he said.

Indeed, Target’s good news casts a harsher light on competitors posting weakened sales, including department stores like Kohl’s and JCPenney and specialty retailers like The Gap and Urban Outfitters, which all reported weaker sales over the same period.

“Fashion is all about newness,” retail consultant Craig Johnson said, adding that most of Target’s department store competitors have “lagged” in introducing new proprietary bands.

Over the past several years, the cheap chic retailer has been culling its apparel offerings and adding scores of new private label brands.

Published On : 20-11-2019

Source : New York Post