MINNEAPOLIS, MN – The buy-side sector may be seeing some significant changes coming to Target stores nationwide. The company has unveiled several new strategies to turn its sales around after releasing its Q4 and year-end report for 2016 with lower numbers than expected, causing its shares to fall 13 percent earlier this morning as Reuters reported.

“Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores,” said Brian Cornell, Chairman and CEO of Target, in a press release.

Target’s comparable sales for its fourth quarter decreased 1.5 percent, which was lower than expected by analysts. Target also reported a 43 percent decrease to its profits in comparison to last year. The company’s reported earnings per share was also lower than analyst projections at $1.45. 

In order to combat these reportings, Target is undergoing a long-term overhaul of strategy to regain upward momentum. In the face of what the company pinpointed as decreasing foot traffic and in-store sales, Target leadership plans to remodel a wide number of its stores, and embrace the convenience model in order to bring a push to grocery and its sales.

TheStreet outlined that Target will remodel 100 stores in 2017, and then another 250 stores next year. By 2019, the retailer expects that it will have 600 store remodels under way. Cornell told investors that the company will focus on updating locations that haven’t been in years.

“We’re investing to win share—not surrendering,” Cornell told investors, according to the StarTribune. “There will be winners and there will be losers in this new era in retail. This plan is all about coming out on top.” 

Other highlights from Target’s financial report included: 

• Fourth quarter comparable digital channel sales increased 34 percent
• Fourth quarter GAAP EPS from continuing operations of $1.46 and Adjusted EPS of $1.45
• Fourth quarter EBITDA margin rates were 9.5 percent and 6.5 percent
• Fourth quarter gross margin rate was 26.9 percent
• Full-year year GAAP EPS from continuing operations declined 12.7 percent to $4.58
• Full-year adjusted EPS increased 6.7 percent to $5.01 

Target expects low-to-mid single digit decline in comparable sales over the first quarter of 2017, and an adjusted EPS of $0.80-1.00. For the full-year 2017, Target expects a low-single digit decline in comparable sales, and a GAAP EPS and Adjusted EPS of $3.80 to $4.20. 

For Target’s complete financial report, click here. Is Target's financial stature indicative of where commerce is heading, or will the new focus turn things around?

As Target enacts its plan and moves into its first financial quarter for 2017, stick with AndNowUKnow for updates on the retailer's strategy.

Target