Target Extends Enhancements to Pay and Benefits and Provides COVID-19 Business Update (2024)

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Target Corporation (NYSE:TGT)today announcedextensions of enhanced team member wages and benefits, and provided business updates related to the impact from the novel coronavirus (COVID-19).

In recognition of the significant contributions of frontline team members, Target will extend its $2 an hour temporary wage increase until May 30. The Company will also continue to extend access to free, safe and reliable back-up care for team members, and a 30-day paid leave for team members who are 65 or older, pregnant or who have underlying medical conditions as defined by the CDC, through the end of May. This follows a previously-announced $300 million investment in wages, bonuses, paid leave and benefits for its frontline team members, as outlined in the Company’s March 25 press release. These actions are in addition to protective equipment, dedicated shopping hours and discounts the Company has introduced to support its team members during the pandemic.

“We have deep gratitude for the remarkable effort our team has put into supporting guests across the country. We remain committed to prioritizing our efforts to provide for their well-being so they can take care of themselves and their families during this unprecedented time,” saidBrian Cornell, chairman and CEO of Target Corporation.

To enhance the safety of its stores and distribution centers, Target has taken numerous actions, including providing face masks and gloves to all team members, and implementing rigorous cleaning and social distancing processes. Team members regularly receive guidance to practice healthy hygiene habits, as recommended by the CDC, and will be provided thermometers upon request to perform at-home checks prior to coming to work.

Target is also monitoring store occupancy and metering traffic, when necessary, to enhance the average space per person and reduce the possibility of congestion, and setting aside time multiple times each week for vulnerable guests to shop. Additionally, Target has staffed up same-day services to accommodate increased guest demand and offers a contactless Drive Up service for online purchases across the country.

More information on how Target is supporting its guests and team members in response to COVID-19can be found onTarget.com/abullseyeview.

Update on Financial Performance

“Our strategy was built to be durable and sustainable in any environment and its strength is driving our business in the face of marked shifts in shopping behaviors caused by COVID-19,” said Cornell. “Because of our strong business model, we are able to make considerable investments to support our team, put protections in place, and adjust to serve our guests who are being advised to shelter in place and avoid stores. As a result, we are seeing record-setting digital growth, strong demand for our same-day fulfillment services and broad market-share gains across each of our core categories. While this crisis will certainly put near-term pressure on our profitability, that pressure is far outweighed by doing right by our team and our guests. We’re confident the actions we’re taking today will drive growth and greater guest affinity over the long-term.”

Quarter-to-date, total Company comparable sales have grown more than 7 percent, reflecting a slight decline in stores and more than 100 percent growth in digital channels. Across the Company’s core merchandise categories, comparable sales have grown more than 20 percent in Essentials and Food & Beverage, more than 16 percent in Hardlines, increased slightly in Home and declined more than 20 percent in Apparel & Accessories. During the quarter, there have been significant changes in shopping patterns, as guests have reacted to the COVID-19 pandemic. Throughout this period, Target has seen broad market-share gains across its core merchandising categories.

  • As previously disclosed in the Company’s March 25 press release, for the month of February, total Company comparable sales increased 3.8 percent with strength across its entire multi-category portfolio. Late in the month, Target saw an increase in traffic and comparable sales in both its stores and digital channels as consumers began stock-up shopping.
  • Around the middle of March, there was an even stronger surge in traffic and sales, while category mix became heavily concentrated in the Essentials and Food & Beverage categories. Later in the month, as guests across the country began to shelter in place, sales trends in stores softened significantly while digital sales accelerated dramatically. For the month in total, comparable sales increased in the low double digits, reflecting mid-single digit growth in stores and more than 100 percent in Target’s digital channels. Across the Company’s merchandise assortment, March comparable sales increased approximately 40 percent in both Essentials and Food & Beverage, and by approximately 20 percent in Hardlines. For the month, comparable sales declined in the low single digits in Home and more than 30 percent in Apparel & Accessories.
  • In early April, sales trends were similar to late March, but improved meaningfully beginning April 15. Month-to-date in April, comparable sales have increased more than 5 percent, as store comparable sales have declined in the mid-teens while digital comparable sales have increased by more than 275 percent. Across core categories, month-to-date comparable sales have grown more than 12 percent in both Essentials and Food & Beverage, more than 30 percent in Hardlines and in the high teens in Home, while declining more than 40 percent in Apparel & Accessories.

While the Company withdrew its first-quarter guidance on March 25, today it provided additional detail on a number of factors that will reduce its first quarter profitability, including investments in pay and benefits to support team members during the COVID-19 crisis, the shift in category mix towards lower-margin categories, the shift in channel mix towards digital fulfillment, and inventory write-downs in Apparel & Accessories to reflect the rapid deceleration in sales trends. Together, these factors are expected to reduce the Company’s first-quarter operating margin rate by more than 5 percentage points.

Michael Fiddelke, executive vice president and chief financial officer, said, “Over the last several years we have strengthened Target’s operational and financial model, investing in our unique, multi-category merchandise assortment, positioning our stores to fulfill every type of shopping, and supporting and developing our team. Throughout this crisis the response of our business, and especially our team, are providing vivid evidence of the value of this model.

Minneapolis-based Target Corporation (NYSE: TGT) serves guests at nearly 1,900 stores and at Target.com. Since 1946, Target has given 5% of its profit to communities, which today equals millions of dollars a week. For thelatest store count or for more information, visitTarget.com/Pressroom. For a behind-the-scenes look at Target, visitTarget.com/abullseyeview or follow@TargetNews on Twitter. For more on the Target Foundation, click here.

Target Extends Enhancements to Pay and Benefits and Provides COVID-19 Business Update (2024)

FAQs

How did Target respond to COVID? ›

As the COVID-19 crisis has evolved, the Company has been experiencing unusually strong traffic and sales, particularly in its stores and same-day services, as guests rely on Target for essential items like food, medicine, cleaning products and pantry stock-up items.

What did the government do to respond to COVID-19? ›

In March and April, Congress passed four major bills addressing COVID-19: (1) the Coronavirus Preparedness and Response Supplemental Appropriations Act, an USD $8.3 billion bill that provided funding to states and localities for COVID-19 preparedness and response; (2) the Families First Coronavirus Response Act (FFCRA) ...

What did COVID-19 do to supply and demand? ›

Economic shocks caused by the Covid-19 pandemic severely disrupted global supply chains. At the same time, Covid-related shutdowns rapidly rotated consumer demand towards goods and away from in-person services.

How did people react to COVID? ›

In both waves, people typically expressed negative emotion about the Pandemic, although this tendency subsided slightly with time. Some had mixed feelings about the Pandemic, though ambivalent responses were less common during Wave 2. Interestingly, a few people had positive feelings about the Pandemic.

What is the US COVID strategy? ›

The U.S. government will make oxygen and PPE available; enhance testing; provide treatments; strengthen global health systems to fight COVID-19; protect health workers from COVID-19 and essential health services from COVID-19 disruptions; improve detection, monitoring and mitigation of new COVID-19 variants; and ...

How do private labels benefit Target? ›

Private label products are also a good deal for retailers. They don't have to split sales with name brands. And they can give house brands the best shelf real estate, because they own the shelf.

What is the role of the COVID-19 response team? ›

protocols lead: Oversee the development of the institution pandemic preparedness and response plan; develop and monitor protocol related to virus prevention including, but not limited to, symptom monitoring, rapid testing, and contact tracing.

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