Target (NYSE: TGT), whose stock is currently trading at around $110, generates its revenue from its Stores operating across the US. In this note we discuss the historical performance, and expected Total Revenue for FY 2019. You can look at our interactive dashboard analysis ~ Target Revenue: How does Target make money? ~ for more details.

 

Target Business Model:

What Does Target offer?

  • Target Corporation was incorporated in Minnesota in 1902. They refer to their customers as “guests.” The company offers differentiated merchandise at discounted prices (including everyday essentials). It sells a wide assortment of general merchandise and food through its stores located in various cities in the US.

Who Pays?

  • End users are normally individuals as Target offers a wide food assortment, including perishables, dry grocery, dairy, and frozen items.

What Are The Alternatives?

  • Major competitors are companies like Best Buy, Bed Bath & Beyond, Costco, and Walmart.

What Is The Basis of Competition?

  • The basis of competition for Target is differentiating guests’ shopping experience through a combination of price, merchandise assortment, store environment, convenience, guest service, loyalty programs, and marketing efforts. They also differentiate through cleanliness and safety of a store, functionality, reliability, and speed of digital channels and fulfillment options, and a store’s in-stock levels.

 Target’s Total Revenue has grown by 7.2% between 2016 and 2018, and is expected to grow by 4.6% in 2019:

  • Total Revenue has seen continuous growth over the years as it increased from $70.3 billion in FY 2016 to $75.4 billion in FY 2018. Trefis estimates revenue to be around $78.8 billion for FY 2019 (ended January 2020).
  • Target has continuously added more and more stores in the US over the years as they increased from 1,797 in FY 2016 to 1,833 in FY 2018. Trefis estimates stores to be around 1,851 for FY 2019 (ended January 2020).
  • US average revenue per square feet metric has seen the highest growth over the years as it increased from $293.4 in FY 2016 to $314.7 in FY 2018. Trefis estimates the metric to reach around $324.1 for FY 2019 (ended January 2020).
  • US average square footage per store has seen a slight decrease from 133.3K in FY 2016 to 130.6K in FY 2018. Trefis estimates the metric to recover slightly and reach around 131.3K in FY 2019.

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