Target is feeling the effects of Walmart’s holiday layaway...
Target is feeling the effects of Walmart’s holiday layaway program, Target executives said Wednesday on the company’s Q3 earnings call. The layaway program, which began Oct. 17, enables consumers to delay payment on total purchases of $50 or more that…
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are paid off by Dec. 16. Walmart’s layaway program “hurt us in November,” said Kathryn Tesija, executive vice president-merchandising, “but it remains to be seen if that continues or if it was just a November issue.” Tesija said the toy business is slow so far with “guests still researching what they want to buy so we really haven’t seen the season kick off yet.” Tesija is more sanguine about the electronics category, feeling “pretty confident” about the chain’s Q4 gift items. Tesija said Target has seen “good results so far” in electronics positioned as gift items, including e-readers, tablets, iPods and iPads. CEO Gregg Steinhafel referred to “early Black Friday hype” that could be keeping shoppers from stores. “There’s a perception in some of these categories that deals are going to get better, which really isn’t true,” he said. “There’s a lot of discussion out there and a lot of other retailers have released their Black Friday ads early so there’s a lot of comparison shopping going on,” he said. “Unfortunately, that amounts to having to do more business in a shorter period of time, but that’s just the way the marketplace is,” he said. Consumer spending is likely to be soft and uneven until there’s a robust improvement in the jobs market, Steinhafel said, but the company grew comp sales by 4.3 percent in Q3, due to the company’s “core retail business” and RedCard loyalty card business. The company recently announced plans to offer free shipping to shoppers who purchase using their RedCards, which also give shoppers a five percent discount on merchandise, he noted. The company is on track to open its City Target concept stores in four urban areas in 2012, Steinhafel said, and between 125-135 retail stores in Canada in 2013, he said. Target reported profit of $555 million for the quarter ended Oct. 29, compared with $535 million in the year-ago quarter. Earnings per share in Q3 grew 10.2 percent to $0.82 from $0.74 in the same period a year ago, the company said. Target shares closed down 0.45 percent to $52.94