Despite the pandemic affecting inflation, unemployment, and the economy overall, Target is growing faster than it did before the pandemic. On Wednesday, executives signaled they expect there to be no let-up.
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In May, June, and July, sales grew by 8.9%. This is on top of the record growth of more than 24% during the same period last year. Target's profits rose about 7%
"Even after unprecedented growth over the last two years, we see much more opportunity ahead of us, and we're leaning into opportunities to invest in the long-term growth and resiliency of our business," Brian Cornell, the company's chief executive, said in a statement, the Star Tribune reported.
Target had comparable store sales growth before the pandemic with 5% growth in 2018 and 7% in 2019. During that time, the numbers were near the top of the retail industry.
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The company's board has now decided to maintain a share repurchase effort, with shares trading at all-time highs. The board authorized $15 billion in new share repurchases, but it did not specify a time period for them, the Tribune reported.
When the pandemic began and the economy fell apart, Target halted share buybacks as the company's stock prices plummeted. However, in the first six months of this fiscal year, it has bought $3 billion of its shares.
"Our continued strong operating performance and ability to generate cash have supported meaningful investments in our team and our business, along with the return of capital through both dividends and share repurchases," chief financial officer Michael Fiddelke said in a statement. "This new authorization reflects our confidence in the sustained, strong performance of our business, which will enable continued share repurchases in keeping with our long-standing capital deployment goals."
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Target plans to spend $4 billion a year on initiatives like opening small and midsize stores and remodels. It has already opened two new distribution centers which will be used to send small shipments to stores more frequently in the quarter. In addition, more than 100 full-store remodels have already begun, and 19 new stores have opened for the retail giant.
Through the first half of the fiscal year, Target has made $48.7 billion in sales and is on pace to surpass $100 billion for the entire year, especially with the two busiest seasons still to come.