Walmart posted quarterly earnings on Tuesday which showed an astounding 74 percent increase in eCommerce sales from a year prior – mostly due to COVID-19 restrictions and people buying more online. Yesterday, Target released similar quarterly earnings showing an even larger increase in online sales.
On Wednesday, Target released their quarterly earnings report, with the highlight being a 141 percent increase in online sales from a year ago. Other highlights include over 11 percent growth in revenue and a nearly 11 percent increase in same-store sales, as Target kept their doors opens during COVID-19 restrictions to sell groceries and other essential supplies.
While their growth in digital sales was unprecedented, it came at a heavy cost. Supply chain and labor costs also rose significantly for the company to keep up with online demand, and net profits fell to $284 million – down from $795 million a year earlier.
Higher-margin items also contributed to a loss in profit, with apparel falling 20 percent in overall sales during the quarter.
Ultimately, Target CEO Brian Cornell said that the COVID-19 pandemic has created a quantitative loss of over $500 million for the company this quarter. The company sold plenty of groceries and lower-margin items online, but sales failed to increase profits.