Target to invest $4 billion to speed new stores, expand supply chain

A person wearing a protective mask walks past a Target Corp. store at the Grossmont Center Mall in La Mesa, California, U.S., on Thursday, Feb. 11, 2021.

Bing Guan | Bloomberg | Getty Images

Target said Tuesday that it hopes to build on its recent growth by investing about $4 billion annually over the next several years to speed along new stores, remodel existing ones and increase its ability to quickly fulfill online orders.

Investors and analysts were left without a key piece of information, however: An outlook for the year. The company declined to provide guidance, saying Covid-19 made it difficult to predict consumer spending.

Shares were down nearly 5% early Tuesday, despite Target beating fourth-quarter earnings expectations.

At a virtual investor day on Tuesday, Target CEO Brian Cornell made the case that the retailer’s recent results aren’t a pandemic-related blip, but the payoff of its long-term business strategy. He pointed to investments and decisions it has made over the past five years such as its growing collection of private label brands, its partnerships with popular national brands and using its stores as hubs to fulfill online orders.

“Far from being a fluke, this performance is further proof that we built a business model that is working as intended, one that puts Target in a category of its own,” Cornell said.

He told investors that continued uncertainty won’t distract the company in the coming months.

“I recognize the frustration, not being more precise, particularly on the top line as we think about sales, but I can guarantee you our entire leadership team and every part of this organization is focused on retaining and growing market share, no matter what the variables are we have to face,” Cornell said.

New stores, distribution centers

Source link


Please enter your comment!
Please enter your name here