How Target plans to keep growing sales

Inflation is soaring. The war in Ukraine is roiling equities and energy markets. And as Covid cases wane, people are spending more on commuting and dining out.

But Target, which has been a big beneficiary of the pandemic economy, believes it can build on its already strong sales growth.

Target has become a $100 billion company during the global health crisis. The pandemic has highlighted investments the company made over the past several years, from sprucing up the look of stores to turning them into fulfillment hubs for online orders.

On Tuesday, Target argued that it can keep driving growth. It also shared a rosy forecast for the coming year: Revenue growth for the coming year in the low to mid single digits and projected adjusted earnings per share to rise by high single digits. That outlook surpassed analysts’ expectations, according to Refinitiv.

Here are five strategies the company plans to use as it works to live up to its projections:

Sipping a Starbucks coffee. Sampling lotion and lip gloss at Ulta Beauty. Trying out a new Apple device. A trip to Target stores can feel a lot like a trip to the mall — and that’s by design.

The retailer plans to add more shops and displays featuring popular national brands as it refreshes many of its roughly 1,900 U.S. stores. Target sees the destinations — such as Disney and Levi Strauss shops— as a way to draw customers and keep them coming back.

It has remodeled more than half of its stores and plans to remodel about 200 more this year, Chief Operating Officer John Mulligan said Tuesday. He said it plans to keep up that pace in the years ahead.

One of its major partnerships is with Ulta Beauty. It opened the first curated beauty shop inside of its stores in August and plans to add more than 250 new locations this year — to ultimately reach at least 800 total, said Target Chief Growth Officer Christina Hennington.

She said stores that include one of the mini Ulta shops have gotten a mid-teens lift in sales across total beauty and have higher rates of sales in complementary categories, too.

Hennington shared another way that stores will soon resemble malls: They’ll offer ear piercings. About 200 locations already pierce ears through a partnership with piercing company, Rowan, and more are coming soon, she said.