Skip navigation
Target_Order_Pickup_counter.jpg Target
Target's fiscal 2020 sales climbed 19.8%, reflecting a 19.3% increase in comparable sales and a 145% jump in digital sales.

Target adds $15 billion to top line in fiscal 2020

CEO Brian Cornell says business model ‘puts Target in a category of its own’

Target Corp. cited omnichannel synergies amid the COVID-19 pandemic as catalyst for nearly 20% fiscal 2020 comparable-sales growth, with digital sales accounting for nearly $10 billion of the $15 billion added to the company’s top line for the year.

Also, at the bottom line, Minneapolis-based Target said Tuesday that it posted record highs in adjusted earnings per year for both the fourth quarter and full year.

For the quarter ended Jan. 30, sales came in at $28 billion, up 21% from $23.13 billion a year earlier. Including other revenue of $342 million, Target saw total revenue rise 21.1% to $28.33 billion.

Comparable sales jumped 20.5% in the fourth quarter, reflecting gains of 6.5% in traffic and 13.1% in average ticket size, according to Target. By channel, comp sales grew 6.9% for stores and and 118% for digital.

Fiscal 2020 sales climbed 19.8% to $92.4 billion from $77.13 billion in 2019. Total revenue, including other income of $1.16 billion, advanced 19.8% to $93.56 billion. Target said full-year sales reflect a 19.3% increase in comp sales combined with sales from non-mature stores. Comp-sales results were up 7.2% for stores and 145% for digital.

Target noted that digital sales growth of almost $10 billion in 2020 was driven by a 235% in sales for same-day pickup and delivery services, and the company’s more than $15 billion in overall sales growth for the year exceeded its combined sales growth over the past 11 years.


In a conference call with analysts on Tuesday, Chairman and CEO Brian Cornell (left) said Target gained “meaningful market share” in fiscal 2020 across all five of its merchandising categories, totaling about $9 billion.

“At this meeting three or four years ago, it would have been hard for any of us or any of you to imagine digital penetration of 18% without a dramatic deterioration in our P&L. Yet, today, we announced record-high full year adjusted EPS of $9.42,” Cornell told analysts. “Importantly, we accomplished all of this while making huge incremental investments in our team’s safety and well-being and completely re-outfitting our stores to keep our team and guests safe. 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.”

Target’s e-commerce performance in the fourth quarter illustrated the strengths of its omnichannel model, as digital sales generated two-thirds of the company’s overall comp-sales growth. Same-day services — including Order Pick Up (in-store pickup), Drive Up (curbside pickup) and Shipt (home delivery) had sales growth of 212%, fueled by a more than 500% sales gain for Drive Up. More than 95% of Target’s fourth-quarter sales were fulfilled by stores.

“The enormous investments we made in supply chain, store operations and technology capabilities are already powering exponential growth in digital commerce. They have enabled us to use our stores as showrooms and service centers but also as hubs for digital fulfillment,” Cornell explained. “Without these investments, we simply wouldn’t have been able to satisfy the exploding guest demand for same-day services, represented by more than 600% [annual] growth in Drive Up. Likewise, Shipt is an extraordinary capability that grew by more than 300% last year and will continue to grow as more guests recognize the power of having their purchases brought to their doorstep in as little as an hour.”

Chief Operating Officer John Mulligan said in the call that Target also is testing a micro-fulfillment concept at a facility in Minneapolis dubbed a “sortation center.” Under the model, backroom store staff processing digital orders focus just on picking and packing, and orders are brought to the sortation center for collating to the various carriers for delivery.

“This capability frees up time and space in our stores, which we can redirect into fulfilling more orders. In the end, it allows us to get orders to guests faster and at a lower cost,” Mulligan said. “While we're still ramping up production at this first test facility, we’re very confident in this concept and plan to open five additional sites in other urban markets later this year.”


Drive Up curbside pickup sales surged by more than 500% in the fourth quarter and over 600% for the year.

On the brick-and-mortar front, Target in 2021 aims to accelerate its new-store openings to 30 to 40 locations a year, “a pace we’ll keep up for the foreseeable future,” according to Mulligan. That includes small-format stores, of which Target opened 29 in 2020.

“With our small-format strategy, we’ll expand in urban markets like Portland, L.A. and New York City, where there are still opportunities to serve new guests. And we’ll continue our focus on college tours, with the University of Georgia and the University of Michigan planned for later this year. We remain extremely bullish on our college sites,” he said.

“We’ll also open a number of midsized stores to serve dense urban neighborhoods from Denver to Brooklyn,” Mulligan added. “As hundreds of retail vacancies have left holes in communities across the country, we’ve committed to sites where we can fill a feed need for the local guest. And as retail real estate prices have declined this year, we found these opportunities to serve new communities to be even more affordable.”

Due to the pandemic, Target clamped down on store remodels in 2020 but finished the projects already under way, completing about 130 renovations. Store upgrades will be rekindled in 2021, Mulligan noted.

“Along with opening new stores, we’ll get back to remodeling our existing fleet. After stopping our full-store remodels last spring, we’ll pick back up later this year and complete about 150 stores in time for the holidays. And we plan to ramp up to more than 200 stores a year in 2022 and beyond,” he said. “Safety and ease have become the heart of Target’s shopping experience, and we’ll incorporate what we learned during 2020 into our future store design. That includes implementing more contactless features from our restrooms to our checkouts and adding distance between merchandise and at the check lanes.”


Target aims to complete about 150 store remodels by the holiday shopping season.

Target finished fiscal 2020 with 1,897 stores overall, a net gain of 29 from 1,868 at the end of fiscal 2019. Its retail network includes 273 stores of 170,000 square feet or more, 1,509 stores of 50,000 to 169,999 square feet and 115 stores of 49,999 square feet or less.

On the earnings side, Target posted fourth-quarter net earnings (continuing operations) of $1.38 billion, or $2.73 per diluted share, compared with $833 million, or $1.63 per diluted share, a year ago. Adjusted EPS (continuing operations) were $2.67 per diluted share, versus $1.69 in the prior-year period. Analysts, on average, had projected 2020 quarterly adjusted EPS of $2.54, with estimates ranging from $2.15 to $3.05, according to Refinitiv.

Full-year net income (continuing operations) totaled $4.37 billion, or $8.64 per diluted share, compared with $3.27 billion, or $6.39 per diluted share, in fiscal 2019. On an adjusted basis, EPS (continuing operations) came in at $9.42 per diluted share versus $6.39 in 2019. Target said full-year GAAP EPS reflects a 75-cent-per-share loss on debt extinguishment. Wall Street’s consensus estimate was for adjusted EPS of $9.30, with projections running from $8.90 to $9.80.

“Staying closely connected to our guests always points us in the right direction. That’s what helped us see a future five years ago that today is a reality, and it’s why we’re stepping up our investments to drive additional profitable growth,” Cornell said to analysts on the call. “Unlike in recent years when we needed to shore up our foundation or create new capabilities, today’s investments will build on an omnichannel Target platform that is already working incredibly well, a platform that has raised expectations not just among Target guests but for consumers across U.S. retail.”

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.