Target’s Black Friday Plans Bode Well for TGT Stock

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Retailers are stumbling over themselves devising new ways to attack Black Friday and the holiday selling season this year, and Target (TGT) is determined to stand out in what’s proving to be an underwhelming year for TGT stock.

target earnings, tgt, target stock, tgt stockTGT stock is up 1.5% for the year-to-date. That beats the S&P 500 by less than a percentage point. Sure, that’s better than lagging the benchmark index, but it’s hardly an impressive year of returns.

Target stock just might be able to enjoy a strong run into the year’s end, but that depends on how it did in the most recent quarter (to be reported next week), its outlook and — most importantly — how well it can drive sales after Black Friday ignites the nation’s feeding frenzy.

To that end, TGT is looking to differentiate itself from other seasonal promotions by offering 10 days of deals this holiday shopping season.

The TGT promotion actually kicks off on the the Sunday before Thanksgiving (Nov. 22) and consists of a different category-specific deal every day. For example, a day of discounts on toys could be followed by a day of deals on consumer electronics, and so forth.

The idea is to get shoppers to make more trips to the store, and hopefully buy more than just that day’s deal category while there.

TGT Riding Turnaround Momentum

It’s a clever way to get customers to spread out their shopping, and should help build on TGT’s recent strength.

After a disastrous period in which TGT reeled under a data hack and was forced to abandon some international expansion efforts, operations are looking up.

Over the last year, Target’s new leadership has focused on TGT’s strongest categories (apparel, home goods, toys) and ditched the weaker parts of the business (exiting Canada and selling its pharmacy operations).

The result has been an increase in traffic and same-store sales — important measures of a retailer’s health.

Throw some costs cuts into the mix (TGT aims to slash $2 billion in expenses over the next couple of years), and — surprisingly — Target’s earnings are growing faster than its sales.

TGT still needs to clear the hurdle of its upcoming earnings release and back-to-school selling season results. If the discount retail chain can offer an upbeat report with encouraging guidance, sentiment could very well improve on TGT stock heading into the holidays.

The market certainly gave the thumbs up to TGT’s plan for 10 days of Black Friday-like deals. TGT stock rose solidly in early Tuesday trading.

If nothing else, TGT’s seasonal plans show how aggressive the company is willing to be to goose traffic this holiday season. Target’s ongoing turnaround plan does indeed appear to be turning. If it can have a blowout holiday selling season, TGT stock will be set up for a much better 2016.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/11/target-tgt-stock-black-friday/.

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