Target's top customers spending again
August 17, 2011,
"Our guests have said they would rather shop domestics by category rather can by brands," Kathryn Tesija, evp, merchandising, said during the company's quarterly conference call with analysts today.
As the department transitions into its seasonal set in September, Target will created unified presentations for sheets, comforters and blankets and install better signing, she said.
Also coming next month: the quick hit Missoni program, with 400 skus in home, baby, beauty and apparel. In addition, Target this fall will launch a new ecommerce site, which has been under development for two years.
Target's higher income shoppers are shaking off the austerity of the worst of the recession and are buying discretionary items again, giving a lift to home, said Tesija.
"The top 20% of households with higher income shoppers are shopping more often and spending more," she said. "Moderate households are still cutting back on trips."
Most of the discretionary spending in domestics in taking place at the "better" price tier, she added, although "best" items such as Fieldcrest and Woolrich goods are also experiencing better sales.
Target believes higher retail prices will peak during the third quarter and begin to ease during the fourth, said Tesija. After noting in May that soft goods prices would increase by double-digits in the fall, she clarified the statement. It's not that all soft home and apparel products will experience double-digit hikes, but that the total number of skus carrying higher price tags will expand.
Net income for the quarter ended July 30 rose 3.7% to $704 million, or $1.03 per share. Sales increased 5.1% to $15.9 billion, with comps up 3.9%.