Frequency and replenishment seems to be the key to retail at the moment. And most retailers or brands either have it or you don’t. If you have it, then consumers continue to shop those items, even as they make tradeoffs.

If you don’t have it, sales are off. I think this is the definition of “muddling through.”

Here are a few tidbits:

• Maintaining 2023 full year guidance, but predicting comparable sales declines in Q2

• 0% Comparable sales growth overall. Digital comp sales decline 3.4% offset by comparable store sales growth of 0.7%.

• Comparable traffic up 0.9% — “could be worse” is the phrase that comes to my mind here.

• Inventory levels lower by 16% reflects continued inventory discipline, likely contributing to an operating margin achievement of 5.2% - ahead of last year and guidance.

• Target’s “other” revenue increased 10.2% - less than half the growth of Amazon Q1 advertising revenue growth of 23%, and significantly less than Walmart’s 41% advertising growth. Advertising is the biggest missed opportunity at Target, and second place is not close.

• 97% of sales fulfilled by stores. Always an interesting datapoint to track. Target operates differently than most eCommerce operations.

• Total revenue of $25.3 billion grew 0.6 percent compared with last year, reflecting total sales growth of 0.5 percent and a 10.2 percent increase in other revenue. I’m assuming other revenue is advertising related?

• Back to frequency: beauty (mid-teens growth), food & beverage (high-single digits) and household essentials (low single-digits) posted gains while discretionary categories (home, apparel) posted softness of mid-single to low double-digit declines.

• Investments in same day services paying off with > 5% growth in pickup, drive-up and same-day delivery. However, pickups and driveups tended to be essentials whereas delivery items tended to be more discretionary.

• Target Circle members spend 3x more than non-members.

• First quarter operating income margin rate was 5.2 percent in 2023, compared with 5.3 percent in 2022

• On the capex side, the company has opened 6 of its planned 20 stores so far. My experience is Target tends to hit this number almost on the nose each year.

Beware Q2 Seems to be the Theme