8 High Growth Retail Stocks That Are Profitable in 2024

2. Target Corporation (NYSE:TGT)

5-Year Net Income Growth: 7.31%

5-Year Revenue Growth: 6.90%

TTM Net Income: $4.49 billion 

Number of Hedge Funds as of Q2 2024: 52

Target (NYSE:TGT) is a retail giant that operates more than 2,000 discount department stores and hypermarkets across the US and Canada. It serves its customers, referred to as guests, an array of items, including everyday essentials, fashionables, differentiated merchandise at discounted prices, and an array of general merchandise and food. Its merchandise categories span apparel and accessories, food and beverages, home furnishing and decor, and others.

The company has a strong operational model in place, and holds significant market popularity that gives it a competitive edge. Its comparable sales in Q2 2024 were driven entirely traffic, increasing by 2%. Its store and digital channels also saw growth in Q2, further solidifying the company’s presence in the market.

In addition, sales in apparel, one of its key categories, rose by 3%. Its discretionary categories comprise a significant portion of its revenue and are also improving. With traffic growth in all six merchandising categories of the company, customers seem to be coming back to Target (NYSE:TGT).

Overall, Target (NYSE:TGT) is focusing on controlling what can be controlled and is directing attention to strong execution and retail fundamentals. It is also working on expanding its operating margin rate, aiming to move beyond its pre-pandemic annual rate of 6%. The company is also committed to continued disciplined capital deployment.

It is also focusing on providing value for its guests, and directing attention to low everyday prices. It slashed prices on frequently purchased items, and is highlighting further compelling deals for its Target Circle members. To deliver more value to its guests, it is offering Target Circle cardholders additional 5% savings, sourcing high quality owned brands, and is delivering convenience and ease with Target Circle 360 and Drive Up.

Carillon Eagle Growth & Income Fund stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:

“Target Corporation’s (NYSE:TGT) sales continue to feel the consumer softness in discretionary goods. In addition, while margins are recovering, they are not up to expectations. Encouragingly, sales are sequentially increasing, and comparable sales are expected to get easier as Target enters the back half of the year.”