What's Behind Target's Strong E-Commerce Growth?
Target (NYSE: TGT) hit a bulls-eye with its second-quarter earnings report, headlined by comparable-store sales growth of 3.4%. Digital sales were a major contributor to that growth, up 34% year over year. That's nearly as fast as its larger rival Walmart's (NYSE: WMT) 37% growth in U.S. digital sales, and faster than Amazon's (NASDAQ: AMZN) 20% revenue growth in North America last quarter.
It's worth noting Target's rapid digital sales growth hasn't had the same negative impact on its operating margin as Walmart's digital sales growth has. Both gross margin and operating margin expanded for the company year over year last quarter. That said, the company notes that digital fulfillment and supply chain investments are still a drag on profits.
Understanding what's driving Target's e-commerce growth, which is a crucial piece of its overall growth, will help investors determine what's in store for the retailer's financial future.
Source Fool.com
