Target Corp. announced several executive changes — including a newly created food and beverage position and an upcoming succession at chief financial officer— in reporting increased 2018 holiday sales.
Target said Thursday that it has named Chief Human Resources Officer Stephanie Lundquist as president of food and beverage. In the role, she will oversee all food and beverage merchandising and operations, including strategy development and implementation.
L-R: Stephanie Lundquist, Cathy Smith and Rick Gomez.
Lundquist, who joined Target in 2005, has served as chief HR officer since 2016. The Minneapolis-based retailer noted that she brings enterprise leadership and operations experience to her new role, in which she will continue to report directly to Chairman and CEO Brian Cornell and remain part of the company's leadership team. Taking over from Lundquist as chief HR officer is Melissa Kremer, who has been promoted from senior vice president of HR.
At the CFO spot, incumbent Cathy Smith plans to retire. Plans call for Smith to continue in her role until the company names a successor, after which she will serve in an advisory role until May 2020 to help in the transition. Target said it has retained an executive search firm and is considering internal and external candidates. Smith joined Target as CFO in 2015 from pharmacy benefits manager Express Scripts, where she also was CFO.
"Cathy's deep expertise and leadership helped usher in strategic change for Target and positioned us for sustainable, long-term growth," Cornell said in a statement. "I appreciate the role Cathy will continue to play as we identify a successor and manage a seamless transition."
In other changes, Chief Marketing Officer Rick Gomez has added the title of Chief Digital Officer. He now will now lead Target's digital team, in particular focusing on efforts to enhance personalization, loyalty and the overall shopping experience, Target said. Gomez, who joined Target in 2013 as senior vice president of brand and category marketing, has served as CMO since 2017.
Also getting an expanded role is Chief Information Officer Mike McNamara, who will now lead the enterprise data analytics and business intelligence team in addition to overseeing Target's technology services. In addition, the company has promoted Katie Boylan, senior vice president of communications, to chief communications officer.
Target's new grocery format is featured in a Richmond, Va., store.
For the November/December holiday period, Target said same-store sales rose 5.7% year over year, reflecting strong traffic and a 29% increase in comparable digital sales. The company noted that, including 3.4% November/December comp-store sales growth in 2017, holiday same-store sales are up over 9% for the past two years.
Target reported that it also expects 2018 to be its fifth straight year of digital sales growth exceeding 25%.
"We are very pleased with Target's holiday season performance, which came on top of really strong results in the same period last year,” Cornell commented. “This performance demonstrates the benefit of placing our stores at the center of every way we serve our guests, including both in-store shopping and digital fulfillment.”
Target reiterated its guidance of an approximately 5% comp-store sales gain for the 2018 fourth quarter. The company also affirmed its earnings-per-share outlook of $5.30 to $5.50 in adjusted EPS and $5.41 to $5.61 in GAAP EPS for the full year.
“Given our fourth-quarter outlook, we are on track to deliver Target's strongest full-year comparable sales growth since 2005, market-share gains across all of our core merchandising categories, and double-digit growth in adjusted EPS,” Cornell added. “In 2019, we expect to build on this momentum as we gain further scale in our fulfillment capabilities and deliver profitable growth throughout the year."
Despite good holiday sales results, Target’s November/December numbers fell short of rising expectations among investors, and the company upheld its previous guidance and provided no insight into 2019, according to Jefferies analyst Christopher Mandeville.
In a research note Thursday, Mandeville also noted that Target addressed a “department pain point” with Lundquist’s appointment as food and beverage president. “While it's unclear as to whether Ms. Lundquist holds any direct food/beverage experience, we look favorably upon the move, as it will provide incremental focus on this category,” he wrote.
