Target's Apparel Sales Grew 10% in Q3

The compliment magnets in my wardrobe have one thing in common: They look like Alaïas, but they’re actually from Target. I’m not alone, considering apparel is now Target’s fastest-growing segment.

Earnings beat, but make it fashion

On Wednesday, Target reported that its Q3 revenue increased to $18.7 billion, up 4.7% from the previous year. Net income rose 14.5% to $706 million. And the bow on top? Target said its apparel sales increased more than 10%.

As clothing divisions at J.C. Penney, Macy’s, and Kohl’s wrinkled in Q3, Target’s apparel gains were "one of the highlights of our quarter if not for the entire year,” said CEO Brian Cornell. How Target earned bragging rights:

• It gave each of its private-label brands their own in-store boutiques with better lighting and bigger displays.
• Target has built so much brand affinity, it’s skirted the race-to-the-bottom discounts pushed by rival stores.

My takeaway: With robust margins from apparel, Target hardly needs its annual designer collaboration to clear its hangers.