It’s just a good business decision to keep raising hourly wages for workers, as it will help keep the best talent that leads to strong sales and profits, explains Target CFO Michael Fidelke.
Target said this week that it will raise hourly wages for workers in distribution centers, stores, etc. up to $ 15 to $ 24 per hour depending on location and position. The total investment will amount to $ 300 million. In 2017, the dissenter revealed a desire to increase his minimum wage to $ 15 per hour by 2020, which he achieved.
“It’s all an investment in the team to provide an exceptional growth-enhancing experience. And right now, that’s good for us,” Fidelke told Yahoo Finance Live. “We track things like the performance of our ability to attract and retain a great team. And these indicators are looking for us stronger today than before the pandemic. And so those investments pay off, and the team pays for that investment with their support for the growth we see. “
This virtuous circle of happy, well-compensated retail employees – unlike the model that Costco has long pioneered – leading to strong financial results seems to exist at Target.
The company said on Tuesday that in the fourth quarter, comparable in-store sales and online comparable sales rose 8.9% and 9.2%, respectively. Earnings of $ 3.19 per share exceeded analysts’ estimates of $ 2.88 per share.
Shares of Target jumped 12% during the session.
“The quarter was driven by traffic. This means that users voted with their feet and clicks and chose Target more often. So this is an incredibly healthy sign for our business, “Fidelke added.
The company also outlined a “long-term” high single-digit growth rate for EPS. The Street was a model for about 8% growth in EPS over each of the next three years.
Brian Sosie is the editor – in – chief and a leader in Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and so on LinkedIn.
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