Sales at Target grew $15 billion last year — more than the 11 previous years combined — as the retailer became one of the top shopping destinations during the coronavirus pandemic.
The company's fourth quarter, which included holiday sales, was the capstone of an overwhelmingly successful year for the Minneapolis-based retailer.
Quarterly revenue grew 21% to $28 billion, and comparable sales grew more than 20%, led by a 118% bump in digital sales, the company said Tuesday. Net earnings grew 65.6% to $1.38 billion, or $2.73 a share.
"Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020, as our guests turned to Target to safely provide for their families throughout the pandemic," said Brian Cornell, Target's chief executive, in a statement.
With the gains, Target earned nearly $9 billion in market share in 2020 across its categories, Cornell said.
The company beat quarterly Wall Street estimates with earnings per share reaching an all-time high.
For the entire fiscal year, which ended Jan. 30, sales grew 19.8% to $92.4 billion, as earnings rose 33% to $4.37 billion.
Executives are expected to outline later Tuesday at a virtual meeting with the financial community how Target plans to capitalize on the success.
Around this time last year, Target executives guessed COVID-19 would not have a significant effect on sales for the year.
But with stay-at-home orders issued across the country and many consumers concerned about in-person shopping, customers rushed to stock up on home necessities such as toilet paper and pantry items in the beginning months of the pandemic.
Shoppers turned in droves to pickup and delivery services throughout the year.
The average transaction or basket was 15% more than in the year before, as more customers relied on Target as a one-stop shop for their buying needs.
Target — which had steadily built out its same-day options before the pandemic — was well-positioned to offer contactless ways to shop. Store employees fulfilled 95% of online orders, after the retailer had worked to perfect a store-centric fulfillment model over the past few years.
Same-day services, including from Target's delivery service Shipt, grew 235% during the fiscal year. Target's digital sales grew by nearly $10 billion.
Twelve million more customers became multichannel shoppers who used more than one way to shop at Target. Over time, these customers are found to spend nearly four times more than those who shop only in stores.
Target Chief Operating Officer John Mulligan said last week that Target grew a lot of brand loyalty in 2020.
"We were able to meet (customers) wherever they were … Our team built trust with our guests that they were going to meet their needs," Mulligan said. "And just having what they wanted when they came in the store, just having that item on the shelves creates trust."
However, the fiscal year will be hard to top. While remarkably high, Target's comparable sales growth for the fourth quarter is less than in the past two quarters, which might be an indicator that the rate of growth is slowing.
Target executives did not give specific financial guidance due to the continued uncertainty connected with the pandemic.