The pandemic drove Target to a record year of sales growth, as shoppers stocked up at its stores and bought online.
Target’s 2020 sales increased 19.8% to $93.6 billion from $78.1 billion last year, the company said Tuesday. Digital sales, which include home delivery and in-store pickup, increased 145%.
Target’s sales growth of more than $15 billion last year was larger than its total sales growth over the past 11 years combined.
“Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020,” Target CEO Brian Cornell said in a news release.
Target’s net earnings increased 33.1% to $4.4 billion last year.
The pandemic changed shopping behaviors “nearly overnight,” Target chief operating officer John Mulligan said during a presentation to investors Tuesday.
“We saw heavy stock up trips, huge in-store surges and then a quick shift to online shopping.” Shoppers bought food and essentials, home goods, office and school supplies and fitness equipment as they spent more time at home, he said.
Target’s stock has increased around 81% during the last 12 months. Its shares fell around 3% during early trading Tuesday, in part because Target did not release guidance for 2021, citing “continued uncertainty” from the pandemic.
The pandemic has created a stark divide in retail. It has lifted big box chains such Target (TGT), Walmart (WMT) and Costco (COST) that have stayed open throughout the pandemic, as well as Amazon (AMZN).
Meanwhile, department stores and mall-based retailers that were forced to close when the virus surged last spring have not bounced back. Target said it gained nearly $9 billion in market share last year from rivals.
Target said it will spend $4 billion a year remodeling stores, opening new small and mid-sized stores in cities, college campuses and dense suburbs, and on its supply chain to fulfill online orders.
Joseph Feldman, analyst at Telsey Advisory Group, said in a note to clients Tuesday that “Target remains well positioned to gain market share.”