Highlights from Target Q3 Earnings Call on 11/15/12

Q3 US sales increased 3.4% to 16.6 billion in third quarter 2012 from 16.1 billion last year

Q3 US comp +2.9%

Heard on the call…

Online:

Free wi-fi now rolled out across the chain.

Target sees a halo effect from stores to their online site.

Not currently offering “buy online ship to store” but it’s something they’re looking at.

In store, Target has created QR codes for each of their top 20 toys, allowing guests to purchase by scanning the QR code in store and then having the toy shipped anywhere in US for free.

City Target stores:

There are now five City Target stores operating in four different metro areas:  Chicago, LA, San Francisco and Seattle with plans to open three more in 2013.

Typical guest is younger and more affluent than seen across the chain as a whole.

See pics of Seattle City Target here (from Seattle PI):  https://blog.seattlepi.com/thebigblog/2012/07/23/photos-tour-seattles-new-city-target/#6468-28)

Canada:  

Moving forward to open first stores by next April.

5% Reward “Red Card”:  (Note — Target is in love with their Red Card and talked about it at length on the call)

14% penetration on purchases in Q3, up 400 basis points from a year ago.

In Kansas City, where the Red Card was launched a year earlier, penetration reached 20% this month.

Big driver is the debit card which continues to grow at a 3:1 clip vs the credit card. As expected, Red Card use is higher online and in certain categories (assumption being higher dollar ticket items).

Comps:

Comps strongest in food, health and beauty.

Comps in apparel were up slightly, strongest in mens and active wear.

Hardline comps down overall; softest in electronics which reflects mature product cycles.

Pricing:

Target didn’t seem to think that competitors layaway programs were having much of an impact on sales.

Regarding price match policy over holidays, Target doesn’t see much price matching in stores now and doesn’t anticipate much over holidays either.  Will assess program after holidays to see if they should consider in 2013.

https://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1759107&highlight= 

Highlights from Dollar Tree Q3 Earnings Release on 11/15/12

Q3 net sales +7.8% (1.72 billion)

Q3 comp sales +1.6

Q3 opened 111 stores, expanded or relocated 16, closed 4.

Q3 retail selling square footage +7.1% compared to a year ago to 40.1 million square feet.

See full release here:  https://www.dollartreeinfo.com/investors/global/releasedetail.cfm?ReleaseID=721513

“How Apple, Target and Starbucks are skirting Seattle’s billboard laws” (Video) by Amy Rolph at Seattle PI / KOMO News in Seattle.  “This is a fascinating report from seattlepi.com’s news partner KOMO News. City law dictates that billboards on buildings can only advertise merchandise actually sold inside — but many companies have found a creative way of getting around that rule.”  https://blog.seattlepi.com/thebigblog/2012/11/14/how-apple-target-and-starbucks-are-skirting-seattles-billboard-laws/  

“Costco (Home Depot & Others) Offers Shoppers Mortgage Refinancing Loans” (Video) on Fox Business News.  “George Mason University professor Anthony Sanders says increasing regulation on banks has opened the door for non-traditional lenders…Home Depot offering home repair loans.”  https://video.foxbusiness.com/v/1971748544001/

“Denver is First to Experience the New Office Depot – a New Store Concept Designed by Customers, for Customers.”  “Office Depot has built an entirely new store experience for its customers, and is debuting it in four new stores in Denver. The new concept store was created to encourage customers to interact more with products, with Office Depot associates, and with each other – all in a brand new store designed around the way customers want to shop. the new Office Depot Denver stores feature a PC Bar where people can sit down, plug in their laptop or tablet and get to work. There is also a computer rental station, free Wi-Fi throughout the store, a recharge station and free, self-serve coffee.”  https://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsLang=en&newsId=20121115005067&div=-1245645151

“Wal-Mart sales under global pressure, shares down” by Brad Dorfman at Reuters. “”When you see a slowdown in sales and then pressure in traffic, that causes investors to be cautious,” Brian Yarbrough, analyst at Edward Jones.  https://www.reuters.com/article/2012/11/15/us-walmart-results-idUSBRE8AE0V420121115

“Wal-Mart Expands Foreign Bribery Investigation” Stephanie Clifford in The New York Times / CNBC:  “Walmart disclosed on Thursday that it has expanded an internal investigation into bribery accusations in Mexico to Brazil, China and India.”  https://www.cnbc.com/id/49842387

“Ahold Expects Markets Conditions to Remain Difficult” by Robert van den Oever in Capital.gr.  “Dutch retailer Royal Ahold NV said Thursday it sees no relief from an intensely competitive U.S. market, as it continues to sacrifice margin in an attempt to attract cost-conscious consumers.”  https://english.capital.gr/News.asp?id=1666691

People Section:  Congrats to Marvin Ellison, Exec. VP at Home Depot, on being named an Outstanding Alumnus at The Fogelman College of Business & Economics.  https://www.hispanicbusiness.com/2012/11/14/u_of_m_business_college_honors.htm