Target's comparable sales post the biggest jump in 4 years during the first quarter

NEW YORK (AP) — Target, which embarked on a turnaround plan under its new CEO earlier this year, reported its largest jump in comparable sales in four years Wednesday.

More customers buying in all six of Target’s main merchandising categories helped deliver the better-than-expected sales, the company said. Comparable sales — those coming from stores and digital channels operating for at least 12 months, rose 5.6% in the three-month period ended May 2. The figure, which compares to a drop a year ago, marked the biggest gain since early 2022.

The retail chain also raised its annual revenue outlook, saying it expected the momentum to continue the rest of the year.

Shares rose more than 1% before the opening bell Wednesday.

Target CEO Michael Fiddelke, a 20-year company veteran who became the struggling retailer’s chief executive in February, said he remained guardedly optimistic given where the company is in its operational overhaul.

“We’re encouraged to see a strong guest response so far,” Fiddelke told reporters Tuesday, adding: “We’re maintaining a cautious outlook given the work we know we have in front of us and ongoing uncertainty in the macroeconomic environment.”

He and other Target executives presented investors in early March with a $6 billion plan to reverse three straight years of sales declines by remodeling stores, reclaiming the chain’s reputation for stocking stylish clothing for shoppers on a budget, and improving store staffing and worker training.

New collaborations with labels like Roller Rabbit, an apparel and home goods brand known for its whimsical, block-print designs, resonated with shoppers, company executives said. An expanded selection of toys costing under $10 also was popular, Fiddelke said.

Target is one of the first big major retailers to report financial results covering the February through April period. Analysts will be interested in hearing any comments from executives on whether consumers have changed their shopping due to surging gasoline prices fueled by the Iran war.

However, the discount chain was struggling well before the war, losing ground to rival Walmart. Customers complained of disheveled stores that lacked the fashionable yet affordable niche that had earned Target the nickname “Tarzhay.”

Fiddelke has been making changes in hopes of drawing shoppers back. He reshuffled the leadership team at Target, increased spending on store staffing and made cuts at distribution facilities and regional offices. On Tuesday, Target named a former Walmart executive as its new head of supply chain as it tries to address another problem that hurt sales: unreliably stocked store shelves.