(Reuters) – Target Corp (TGT.N) reported a 64% plunge in quarterly profit on Wednesday, pummeled by costs to tackle the coronavirus outbreak, even as panic-buying during the crisis lifted the big-box retailer’s online and store sales.
The company spent about $500 million in the first quarter ended May 2 to maintain safety measures at stores and to pay employees higher wages for working through the pandemic.
“Last quarter was unlike anything I’ve ever seen,” Chief Executive Brian Cornell told reporters. “It was intense, it was volatile, it was stressful for guests and the country.”
Stay-at-home orders imposed to contain the virus powered a 141% jump in Target’s online comparable sales, accounting for almost all of its same-store sales growth.
Although sales at stores opened for at least a year rose 0.9%, including digital they jumped 10.8%, beating Wall Street estimates of a 7.49% rise, according to IBES data from Refinitiv.
At the start of the quarter, Target, like Walmart (WMT.N), benefited from customers stockpiling staples and cleaning products, but as the lockdown extended and the stimulus checks arrived, demand rose for discretionary items including apparel.
Target, which has already pulled its financial targets for the year, said it would scale back planned investments to focus on meeting increased demand.
“There’s just so much uncertainty as I think about the balance of the year … Obviously we’re watching closely to see what happens from an economic standpoint,” Cornell said.
The company’s net earnings fell to $284 million from $795 million, a year earlier. On an adjusted basis, the company earned 59 cents per share.
Revenue rose 11.3% to $19.37 billion, edging past expectations of $19.04 billion.
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