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Target Plans To Spend $1.8 Billion In 2016 To Improve Supply Network And Technology

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Target is stepping up its game as it plans to spend $1.8 billion this year to beef up its supply network and technology.

The company disclosed its plan to analysts during its annual meeting on Wednesday in New York.

Starting next year, Target is going to ramp its investment up to $2 to $2.4 billion every year.

The Minneapolis-based company said that it is hoping to grow its online presence a little more forward and also to lessen stock shortages.

Target has pointed its fingers to what it calls "incredibly complex supply chain," which greatly affects some of its stores' sales growth.

In 2015, Target's boss Brian Cornell said that among the company's top goals include fixing its supply chain and boosting its online sales growth.

In the meeting last Wednesday, Cornell said that Target will be "laser focused" on these initiatives it previously presented as part of its multi-year transformation agenda.

The company predicts that the company is going to hit a 10 percent growth in its earnings per share for 2017. This current fiscal year, the company is expecting a $5.20 to $5.40 profit per share.

Cornell wants Target to be more alert after experiencing a few problems, which impacted its progress, including a major debit and credit card breach. The event hampered the company's sales and profits for several months.

When Cornell took over in July 2014, Target halted its operations in Canada. Cornell likewise outlined the company's savings plan and cut a number of jobs.

Under the leadership of Cornell, the company has centered its attention on key merchandise categories, ranging from baby, fashion, wellness products and home furnishings. Target has also revamped its grocery area, offering fresher, healthier choices. The company even added mannequins in displaying its clothing products. On top of that, it began shifting its spending from physical stores to online investments along with its supply network.

Cornell's efforts appear to have started to pay off. For instance, the company saw a 34 percent surge in its online sales during the latest quarter. Its stock shortages were also 40 percent lower during the holiday season as opposed to last year.

"Our guests are falling back in love with Target ... all over again," said Cornell. "So are we declaring victory? Not even close. We're proud of this momentum, but we have a lot of work to do."

In the last fiscal year, the company splurged $1.4 billion in its capital expenditures.

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