MINNEAPOLIS–Target fell short of performance expectations in 2007, with home textiles among the weakest categories of the year, said Gregg Steinhafel, president of Target Stores, during a conference call to review full-year and fourth-quarter results.
In home overall, the “good” and “best” categories in the good-better-best equation are outperforming the “better” midtier assortments, Steinhafel said.
The retailer is adjusting to the weak economic environment by better “communicating the value proposition” of its opening-price-point home fare. It is reinventing its Fieldcrest soft home collection by upgrading the quality and fabrication on the line while lowering some price points, Steinhafel said.
Given the economic climate, “we’re slightly surprised that ‘best’ [in home] is doing as well, and some ‘better’ goods are showing some weaknesses,” Steinhafel said.
The retailer’s limited-edition Global Bazaar direct import home program “did very well for us. We met our sales and profit goals,” he said.
Target executives called the fourth-quarter and full-year results disappointing.
For the fourth quarter ended Feb. 2, Target’s net earnings fell 8.2 percent to $1.028 billion compared with the year-ago period.
Revenues inched up 0.8 percent, to $19.87 billion. Comparable-store sales nudged 0.2 percent.
For full fiscal year 2007, net earnings were $2.849 billion, compared with $2.787 billion in fiscal 2006.
Total revenues rose 6.5 percent to $63.36 billion. Comp-store sales rose 3.0 percent for the year.
The retailer will open 95 stores in 2008.
