Target is relaunching its loyalty program, Target Circle, with a new paid membership called Target Circle 360. The membership, priced at $49 per year for a limited time, offers unlimited free same-day delivery for orders over $35. The move aims to compete with Amazon Prime and Walmart’s membership program.
At its annual investors’ meeting, Target announced plans to refresh its stores and build more than 300 new locations over the next decade. These steps are intended to rejuvenate sales and traffic as the retailer faces challenges due to cautious consumer spending on discretionary items.
Target reported a 58% increase in fourth-quarter profits, beating expectations by cutting costs and maintaining lean inventory. However, comparable sales slipped 4.4%, and the company provided a cautious outlook for the future.
To attract shoppers, Target is striking a balance between offering good value and trendy goods. It recently launched a new collection called Dealworthy, featuring everyday basics under $10, while also partnering with designer Kendra Scott for exclusive jewelry collections.
The free Target Circle membership program, which already has over 100 million members, will continue to offer personalized deals and member-exclusive sales. New features include automatic application of deals at checkout. Target Circle credit cardholders can sign up for Target Circle 360 at a discounted price of $49 per year.
Target’s fourth-quarter net income rose to $1.38 billion, or $2.98 per share, surpassing estimates. Revenue increased 1.7% to $31.92 billion, despite a 1.7% decline in combined store and online traffic.
For the current quarter, Target expects a comparable sales decline of 3% to 5% and adjusted earnings per share between $1.70 and $2.10. For the full year, the company anticipates comparable sales to be unchanged or up 2%, with adjusted earnings per share ranging from $8.60 to $9.60.
The Associated Press contributed to this article.