The solid fourth-quarter financial results Target reported last week were quickly overshadowed by long-term growth objectives that gave stakeholders a clear idea of where the company is headed in terms of sales and profits. Target expects its annual sales, currently about $66 billion, to reach the $100 billion mark within six to seven years, and current earnings per share of $4 will at least double over that same time frame.
If those goals sound lofty and the time frame ambitious, it’s worth reviewing some of the growth drivers the company has in place and those which are yet to take hold.
As 2011 unfolds a slate of merchandising initiatives are set to hit stores this spring. Target celebrates the five year anniversary of its GO International designer program this month with a collection of 34 dresses from 17 designers who previously participate in the program. Also in March, six new stores will open, a new blue-and-white home collection hits stores, and Target will begin offering a line of Godiva brand chocolates in advance of Easter on April 24. May brings the launch of a new limited-duration apparel-and-accessories line under the brand name Calypso St. Barth after the resort wear brand found in 26 boutiques in the United States, St. Barth and Paris.
The coming year will also see the continued rollout of the PFresh remodeling program with 380 stores slated for the upgrade on top of the 341 units remodeled last year. Then there is the expectation that the 5% REDcard Rewards program launched last fall will continue to gain traction and produce the type of favorable impact on sales the company has experienced in the test market of Kansas City.
Later this year comes the opening of another 15 stores in the second and third quarters along with the relaunch of Target.com as the company completes the orderly wind down of its relationship with Amazon.com and converts to its own online platform. It is also conceivable Target will have located a partner to acquire it credit business by year end.
While the current year promises to be one in which the company executes previously announced strategies with store remodeling, credit products and a major online overhaul, 2012 and beyond will bring interesting developments in the area of format development and international expansion.
For starters, 2012 will likely see a ramp up in new store growth in addition to the opening of the first of the company’s smaller format urban stores recently named CityTarget, Locations in downtown Seattle, Los Angeles, Chicago and San Francisco are slated to open in 2012.
The big boost to top-line results occurs in 2013 with the arrival of Target’s in Canada. Between 100 and 150 of the 220 locations acquired from Zellers are scheduled to open over a two year span, but the company has already indicated most of the openings will take place in 2013.
Collectively, all of these initiatives were described by Target chairman, president and CEO Gregg Steinhafel as transformational in nature in keeping with the newly revealed goals of growing sales to $100 billion sales and doubling earnings.