(Reuters) – Target Corp’s (TGT.N) quarterly online sales surged 141% due to panic buying in the coronavirus crisis, the retailer said on Wednesday, driving results past Wall Street expectations even as its operational costs soared.
The company said it had set aside nearly $500 million to spend on maintaining safety standards at stores and pay employees higher wages for working through the pandemic.
“Last quarter was unlike anything I’ve ever seen,” Chief Executive Officer Brian Cornell told reporters. “It was intense, it was volatile, it was stressful for our guests and the country.”
Stay-at-home orders imposed to contain the virus powered a 141% jump in Target’s online comparable sales, accounting for almost all of its same-store sales growth.
Although sales at stores opened for at least a year rose 0.9%, including digital they jumped 10.8% in the first quarter ended May 2, beating expectations, according to IBES data from Refinitiv.
At the start of the quarter, Target, like Walmart (WMT.N), benefited from customers stockpiling staples and cleaning products, but as the lockdown extended and the stimulus checks arrived, demand rose for discretionary goods.
Cornell said he expects demand for non-staple items like beauty products, home goods and clothes to continue into the current quarter.
Target, which has already pulled its financial targets for the year, said it would scale back planned investments to focus on meeting increased demand.
“There’s just so much uncertainty as I think about the balance of the year … Obviously we’re watching closely to see what happens from an economic standpoint,” Cornell said.
The company’s net earnings fell 64.3% to $284 million in the quarter. On an adjusted basis, the company earned 59 cents per share, beating already lowered expectations of 40 cents.
Last month, Target warned that higher expenses would pressure margins, prompting analysts to lower their estimates.
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