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Key Takeaways

The holiday season is a make-or-break time for retailers, as consumer spending trends during this period can significantly impact performance. For Target Corporation (TGT – Free Report), the festive season turned out to be a blissful one.The retailer registered better-than-expected performance buoyed by continued traffic growth. With its seamless shopping experience and value-oriented, in-demand products, Target was quick to attract customers both in stores and online.Target also performed exceptionally during key promotional periods, with record-high sales on Black Friday and Cyber Monday contributing to its overall performance. Stellar holiday sales prompted this Minneapolis-based retailer to lift its comparable sales forecast for the final quarter of fiscal 2024. However, Target maintained its profit outlook.Target’s remarkable holiday surge places it alongside Five Below, Inc. (FIVE – Free Report), Genesco Inc. (GCO – Free Report), and Abercrombie & Fitch Co. (ANF – Free Report). The 2024 holiday season saw core retail sales rise 4% year-over-year to a record $994.1 billion, surpassing the National Retail Federation’s forecast of $979.5-$989 billion and breaking the 2023 record of $955.6 billion.

A Sneak Peek Into Target’s Holiday Performance
Target’s total sales for the months of November and December increased by 2.8% compared with the previous year, reflecting a comparable sales growth of 2%. The company saw a notable uptick in traffic, with an increase of nearly 3%, driven by strong performances both in-store and across digital platforms. This reflected a continued trend of positive traffic growth, with December marking the eighth consecutive month of year-over-year increases.Digital sales grew 9% compared with the same period last year. A major driver of this growth was the same-day delivery service — powered by Target Circle 360 — which experienced more than 30% growth.Target’s third-party marketplace, Target Plus, experienced an impressive 50% increase. This growth demonstrates the increasing importance of digital channels in driving overall sales, with more than 97% of Target’s sales being fulfilled by stores.When comparing performance to the third quarter, Target observed a meaningful acceleration in discretionary categories during the holiday period. Apparel and toys saw a significant increase in sales, while beauty and other frequency categories continued to show strength. These results reflect consumers’ preference for both seasonal and everyday items, positioning Target as a one-stop destination for shoppers.For the fourth quarter, Target anticipates comparable sales growth of approximately 1.5%, better than its earlier forecast of flat comparable sales. However, this Zacks Rank #5 (Strong Sell) rated company continues to anticipate GAAP and adjusted earnings per share (EPS) for the fourth quarter to range from $1.85 to $2.45, with full-year GAAP and adjusted EPS estimated to be between $8.30 and $8.90.

Past Three-Month Performance of Target, Five Below, Genesco, and Abercrombie & Fitch
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Here’s How Five Below, Genesco, and Abercrombie & Fitch Fared This Holiday Season
Five Below stated that holiday results came in line with expectations. The company generated net sales of $1.19 billion during the holiday period (Nov. 3, 2024 through Jan. 4, 2025), up from $1.10 billion reported in the comparable nine-week period from Nov. 5, 2023 through Jan. 6, 2024. However, comparable sales for the holiday period dipped 3.2%, highlighting some softness in same-store performance despite overall revenue gains.Based on the holiday performance and January forecasts, Five Below expects fourth-quarter sales to land in the upper half of its previously provided guidance. This Zacks Rank #1 (Strong Buy) rated company had earlier guided net sales between $1.35 billion and $1.38 billion, with a comparable sales decline of approximately 3% to 5%.Meanwhile, Genesco announced an impressive 10% increase in comparable sales for the fourth-quarter-to-date period ended Dec. 28, 2024. Same-store sales rose 6%, while comparable e-commerce sales surged 20%, signaling the strength of the company’s omnichannel strategy.Breaking down the numbers, the Journeys Group led the charge with a 14% year-over-year increase in comparable sales. The Schuh Group reported modest growth of 3%, while the Johnston & Murphy Group saw a slight decline of 1%. Based on quarter-to-date results, Genesco, a Zacks Rank #1 (Strong Buy) rated company, reiterated its fiscal 2025 earnings guidance of 80 cents to $1.00 per share. Additionally, Abercrombie & Fitch announced an upward revision in its net sales outlook for the fourth quarter and fiscal 2024, courtesy of a successful holiday sales season. This Zacks Rank #1 (Strong Buy) rated company expects fourth-quarter net sales growth to range between 7% and 8%, up from the prior forecast of 5% to 7%. For the full fiscal year, net sales growth is projected at approximately 15% compared with the earlier range of 14%-15%.Management highlighted the company’s exceptional performance, noting that quarter-to-date net sales through December set new records. This achievement reflects robust comparable sales across regions and brands, bolstered by compelling product assortments and strategic marketing efforts.More By This Author:Technology Sector Is Set To Stay As Safe Haven In 2025: 5 Top PicksTime To Buy Netflix Stock As Q4 Earnings Approach?Bull Of The Day: Fox Corporation