Target Corp. online sales grew at more than five times the rate of total comparable sales in its fiscal Q4 2024, according to the retailer’s latest earnings report.
CEO Brian Cornell said consumers took 350 million more trips to Target in 2024 than they did five years prior, in pre-pandemic 2019. Target has grown its revenue by nearly $30 billion in that time frame.
Cornell also said Target expects to invest $4 billion to $5 billion in stores, supply chain and technology in 2025. In doing so, he explained, Target will seek to drive more than $15 billion in revenue growth over the next five years.
Cornell said Target Plus, the retailer’s online marketplace, grew to $1 billion in 2024 and is growing at a double-digit pace. Also in 2024, the retailer added 13 million members to its loyalty program, Target Circle.
In 2024, Target announced a plan to open 300 stores over the course of 10 years. It opened 23 of them in 2024 and plans to open another 20 in 2025.
In Q4, Target net sales decreased 3.1% year over year to $30.9 billion. The retailer’s Q4 2023 included an extra week compared to the same period in 2024. However, comparable sales grew 1.5% year over year in Q4 2024.
Target full-year 2024 net sales decreased to $106.6 billion. That’s down 0.8% from $107.4 billion in 2023.
Target is No. 5 in the Top 2000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales. Target is also No. 80 in the Global Online Marketplaces Database, which ranks the 100 largest global marketplaces by third-party gross merchandise value (GMV). Digital Commerce 360 categorizes Target as a Mass Merchant.
Target is among the “Big Four” Mass Merchants that Digital Commerce 360 covers in depth as part of the newly published State of American Ecommerce Report.
Impact of tariffs on Target
“When we think about tariffs and tariff implications, we only start with the impact on consumers and the families we serve and how in an environment like this, we continue to make sure we’re providing the affordability and value they’re looking for,” Cornell said.
About half of what Target sells is made in the U.S., said Rick Gomez, chief commercial officer.
Among what its owned brands produce, Target reduced what it sources from China to about 30% currently, from about 60% in 2017. Gomez added that Target plans to reduce that even further, to less than a quarter of production by the end of 2026.
In apparel, specifically, just 17% comes from China, he said.
“That includes a strong effort to move production to Western Hemisphere countries like Guatemala and Honduras, which has added the benefit of helping us get product from factories to U.S. consumers even faster,” Gomez said.
Chief financial officer Jim Lee said Target plans “to make some extra flexibility” in its budget to help “navigate uncertainty regarding tariffs. With a sourcing organization that’s decades old, our team has a lot of experience in navigating this type of volatility.”
Lee said Target’s full-year guidance reflects “a wide range of potential scenarios and uncertainty” in the market, which “certainly covers tariffs.”
“What we don’t know is potential consumer demand that’s across the board, based on how tariffs ripple across the economy, for instance. But we have that wide range for the reason,” he said.
Target online sales in Q4
In Q4, Target online sales grew 8.7% year over year. Meanwhile, Target full-year online sales grew 7.5% in 2024 over 2023.
Moreover, an increased share of total sales came from Target online channels, which include its app and website. In Q4, 22.8% of Target sales were digital, compared to 21.3% the year before. Similarly, 19.6% of full-year 2024 Target sales were digital, compared to 18.3% in 2023.
Michael Fiddelke, chief operating officer, said Target knows that today’s customers increasingly shop digitally.
“That’s why we’ve invested in a powerful digital experience to help them find product more often than not in the palm of their hand and social and on our app, positioning Target to win in a world where the consumer purchase funnel is changing,” Fiddelke told investors. “And it’s working. We have a $20 billion digital business that’s hitting on all cylinders with nearly 9% growth in Q4.”
Target online sales have more than tripled over the last five years, Lee said.
Gomez said Target has grown its Food & Beverage business by about $9 billion since 2019.
During that time, he said, Target has become the fifth-largest online grocer in the U.S. To keep up with the surge in demand, he added, Target opened three new food distribution centers over the last two years, expanding its network to eight facilities nationwide. It plans to open another in 2026, he said.
Target’s owned Food & Beverage brand, Good & Gather, is “on the brink of becoming Target’s first $4 billion owned brand,” Gomez told investors.
The retailer plans to add 600 new items to its Good & Gather and Favorite Day brands in 2025, he said.
Target online order fulfillment
The interplay between stores and digital is “critically important” to Target’s strategy, Fiddelke said. That omnichannel approach drives Target fulfillment, as it fulfilled more than 97% of its online orders via stores in 2024, Lee said.
Target increased its average online order delivery time by more than 11% in 2024 compared to the year before, Fiddelke said.
It nearly doubled its next-day delivery packages year over year as well. The retailer’s total shipped package volume has more than doubled since 2019, he added.
“We know speed matters to our guests and that with increased speed comes more sales,” Fiddelke said. “We’ve shared how sortation centers have helped us drive speed and efficiency, and we expect them to continue to grow volume while making us faster and less expensive.”
Fiddelke said Target sees an opportunity to become more efficient in its fulfillment paths over time.
“The most expensive thing to do always will be to ship a package or ship a brown box,” he said.
Target’s retail media network growth
Roundel, Target’s retail media network, delivered “nearly $2 billion in value” in 2024, Cornell said. He said it also “continues to generate significant profitable growth.”
Target reported $190 million in advertising revenue in its fiscal Q4. That’s up from $167 million during the prior year’s Q4. Meanwhile, full-year 2024 Target advertising revenue grew to $649 million from $522 million in 2023.
Cornell said Target recently made “changes to bring roundel and our social commerce teams closer together.” As a result, he expects to double the size of Target’s retail media network business over the next five years.
Check back for more earnings reports. Click here to read last quarter‘s article on Target earnings and online sales.
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