MINNEAPOLIS — Target’s winning streak continued into the summer with the retailer posting a 3.4% jump in comparable sales and raising its profit outlook for the full year.
Traffic rose 2.4% in the second quarter, driven partially by a 34% increase in digital sales and its same-day delivery services through in-store and curbside pickup and Shipt.
The Minneapolis-based retailer’s total profits rose 17% to $938 million, up from $799 in the same quarter a year ago. It beat analysts’ and its own expectations for the second quarter, logging $1.82 in earnings per share, an all-time high for the company and much higher than than the $1.62 analysts had forecast.
The results sent the retailer’s shares up 12% in premarket trading.
“By appealing to shoppers through a compelling assortment, a suite of convenience-driven fulfillment options, competitive prices and an enjoyable shopping experience, we’re increasing Target’s relevancy and deepening the relationship between our guests and our brand,” Target CEO Brian Cornell said in a statement.
Total revenue in the May-to-July quarter rose 3.6% to $18.4 billion.
Target did have one hiccup in the quarter. Cash registers went down and credit card glitches prevented sales for several hours over Father’s Day weekend, but Cornell said earlier that would not have a significant impact on the retailer’s sales and profits.
Under Cornell, who arrived at Target five years ago this month, the retailer has managed to outperform many other retailers in the last couple of years, particularly department stores such as Macy’s and JCPenney, which have been struggling from declining mall traffic and the shift to online shopping. But other big-box stores such as Walmart have also been able rise above the woes that have befallen other retailers.
Target has benefited from strong consumer spending and has picked up market share from struggling retailers or those who have gone out of business such as Toys ‘R’ Us.
It’s in the midst of a multi-year plan to reinvigorate its business through remodeling hundreds of stores and launching dozens of new private-label brands across apparel, home decor, cleaning supplies and electronics, while retiring older ones.
Last week Target unveiled its newest brand, a flagship grocery line called Good & Gather, which will replace store brands Archer Farms and Simply Balanced as well parts of Market Pantry. The move is aimed at helping differentiate Target’s grocery offerings, which haven’t been a historic strength for the retailer.