Target stores may have some big changes happening across the nation, as the retailer looks to shift the face of physical grocery stores. The company’s new strategies were unveiled as it looks to turn its sales around following the release of its Q4 and year-end report for 2016 with lower numbers than expected. The financial report, according to Reuters, caused shares to fall 13 percent earlier this morning.
“Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores,” said Brian Cornell, Chairman and CEO of Target, in a press release.
Target’s comparable sales for its Q4 decreased 1.5 percent, lower than analysts predicted. The company also reported a 43 percent decrease to its profits in comparison to last year. Target’s reported EPS was also lower, at $1.45.
In order to combat these reportings, Target is undergoing a long-term overhaul of strategy to regain upward momentum. In the face of what the company pinpointed as decreasing foot traffic and in-store sales, Target leadership plans to remodel a wide number of its stores, and embrace the convenience model in order to bring a push to grocery and its sales.
“We’re investing to win share—not surrendering,” Cornell told investors, according to the StarTribune. “There will be winners and there will be losers in this new era in retail. This plan is all about coming out on top.”
TheStreet outlined that Target will remodel 100 stores in 2017, and then another 250 stores next year. By 2019, the retailer expects that it will have 600 store remodels under way. Cornell told investors that the company will focus on updating locations that haven’t been in years.
Other highlights from Target’s financial report included:
Target expects low-to-mid single digit decline in comparable sales over the first quarter of 2017, and an adjusted EPS of $0.80-1.00. For the full-year 2017, Target expects a low-single digit decline in comparable sales, and a GAAP EPS and Adjusted EPS of $3.80 to $4.20.
Target’s complete financial report can be viewed here.
Will Target’s new outlook mark a new shift for the face of commerce? Deli Market News will keep you updated on the state of the buy-side sector.
