Target Corp raised its full-year profit forecast after posting better-than-expected quarterly results on Wednesday, signalling a strong holiday season for the big-box retailer as it benefits from same-day delivery services and revamped stores.
The retailer’s shares, which have gained about 68% in 2019, were up more than 10% in trading before the bell. Target has posted strong sales growth in the past few years, winning over customers by speeding up shipment and delivery through drive-up, click-and-collect and Shipt services.
‘Durability of our strategy’
“Our third quarter results are further proof of the durability of our strategy, as we’re seeing industry-leading strength across multiple metrics,” Chief Executive Officer Brian Cornell said. The company’s comparable digital sales surged 31% in the quarter, while store traffic rose 3.1%.
Overall same-store sales rose 4.5%, beating analysts’ average estimate of 3.6% rise. Target said it now expects full-year adjusted profit forecast of $6.25 to $6.45 per share, up from its prior range of $5.90 to $6.20 per share.
Excluding certain items, Target earned $1.36 cents per share in the quarter ended 2 November, beating expectations of $1.19, according to IBES data from Refinitiv. Net earnings rose to $714 million (€645.8 million), or $1.40 per share, from $622 million (€562.6 million), or $1.18 per share, a year earlier.