In order to expand its global footprint, Target Corporation (TGT - Analyst Report) has been focusing on the Canadian market for quite some time now. Recently, the company announced the opening of three new stores at Erin Mills Town Centre in Mississauga, ON; Park Place in Barrie, ON and Carrefour Candiac in Candiac, QC, thereby taking the total store count to 130 in Canada.
In January, Target unveiled the plan of opening of nine stores in Canada with maximum number of outlets to be slated to open in Ontario, and single outlets planned for Quebec, Manitoba, Alberta and British Columbia. So far, the company has opened six stores.
We believe that the opening of stores outside the United States will definitely boost the company’s top and bottom lines and improve its cash flow generation capability. The stores will carry items ranging from beauty and apparel to home, grocery, and personal care.
Some of the brands that would find shelf space in the Target stores include Nate Berkus Collection, Sonia Kashuk and Pixi beauty collections and Shaun White apparel. The stores would also feature a wide range of Target owned and exclusive brands.
Target intends to focus on its core businesses. The company plans to sustain its remodeling program at the existing general merchandise locations by the addition of an expanded food section along with a greater assortment of dry dairy and frozen items, improved store layout and enhancement of in-store shopping experience across departments, such as apparel, home, beauty, shoes and baby.
Of late, Target has been struggling to uplift its brand image that was battered by a massive data breach last holiday season, when information related to credit and debit card data of approximately 70 million customers was hacked. Apart from security infringement, the company’s tepid entry into the Canadian market, weak e-commerce sales and subsequent dismal quarterly performances put it on the back foot. Moreover, the breach has shaken consumer confidence, resulting in lesser footfall and a public relations nightmare for the company.
In order to improve its operations, Target replaced Tony Fisher, the president of its Canadian operations with Mark Schindele. Most recently, the company announced the appointment of Brian Cornell, the chief executive officer of PepsiCo Americas Foods, as its CEO, with effect from Aug 12.
Currently, Target holds Zacks Rank #4 (Sell).
Other Stocks to Consider
Other stocks worth considering in the retail sector include Treehouse Foods, Inc. (THS - Snapshot Report) carrying a Zacks Rank #1 (Strong Buy), as well as Burlington Stores, Inc. (BURL - Snapshot Report) and J&J Snack Foods Corp. (JJSF - Snapshot Report) with a Zacks Rank #2 (Buy).