Target chief Brian Cornell on Tuesday tempered his statements about the strength of American shoppers, about seven months after making a bold call that the consumer environment was “perhaps the strongest I’ve seen in my career.”
“It’s still a very stable consumer environment. Consumers are shopping. You’re seeing strong consumer confidence, still,” said Cornell, who became chairman and CEO of Target in the summer of 2014, after spending more than three decades at other retail and consumer products companies.
“Certainly, we’re going to watch it carefully,” Cornell added, referring to consumer buying trends. “It’s going to ebb and flow. But right now, I think we’re seeing a very consistent consumer environment.”
Cornell’s comments during an interview Tuesday on “Squawk Box”came shortly after Target delivered better-than-expected fourth-quarter earnings, revenue, and same-store sales growth, as well as a rosier full-year outlook.
Based on shares opening more than 5 percent higher, Target was up about 27 percent since its Christmas Eve low, including 15.7 percent in 2019. That compares to the S&P 500‘s nearly 19 percent gain since Christmas Eve, with 11.4 percent of that advance coming in 2019.
Back in August, when stocks and consumer confidence were climbing higher, Cornell told analysts, “There’s no doubt that, like others, we’re currently benefiting from a very strong consumer environment — perhaps the strongest I’ve seen in my career.”
About two months later, Cornell stood by those August remarks, telling CNBC that he saw no change in how Americans feel about their finances, despite sharp declines in the stock market at the time and evidence that some pockets of the economy may be slowing.
During that October interview, he also acknowledged the need to look at 2019 and beyond due to “some concerns about overall global trends,” but said then that consumer sentiment remained “very high.”
But consumer confidence, as measured by the Conference Board research firm, in November and December declined as stocks tanked in the final three months of 2018. Consumer confidence fell again in January as Americans dealt with uncertainty around the partial government shutdown, which turned out to be the longest ever. However, in February, with the shutdown over and stocks sharply rebounding in the opening two months of 2019, consumer confidence bounced higher.
Throughout the market and consumer confidence slides in late 2018 and rebounds in early 2019, the labor market remained relatively strong. The government releases its latest employment report Friday, with economists expecting 180,000 nonfarm jobs to have been added in February, with the unemployment rate dipping to 3.9 percent. The three month nonfarm jobs growth average — January, December, and November — with revisions was 241,000.