Target, Best Buy See Strong Q1 Growth Amid Significant Investments Across Channels

Target saw its strongest quarterly store traffic growth in 10 years, to the tune of 3.7% in Q1, helping boost the retailer’s comparable store sales 3%. Digital sales jumped 28% in another indication that Target is learning how to consistently master e-Commerce.

While sales also jumped yet again, by 3.4% to $16.8 billion, Target’s continued investments in both the store and digital experience — totaling nearly $7 billion — are holding down profits. The company’s Q1 gross margin rate was 29.8%, down slightly from 30% last year, and operating income was $1.04 billion in the quarter, down 9.9% from last year.

Overall, however, the results have to be considered a success for Target — particularly when those investments include the rollout of same-day delivery platform Shipt to 700 stores, the expansion of the Target Restock next-day delivery service to 60 markets, the testing of a new distribution model and continued remodeling of stores.

Best Buy, another company making massive across-the-board investments, saw comparable store sales jump 7.1% in Q1,withtotal sales increasing 6.3% to $8.41 billion. Best Buy has poured money into improved in-store customer service, Geek Squad services, a revamped e-Commerce site, price matching and…