Target’s (TGT) stock is up 12% after the discount retailer delivered fiscal second-quarter financial results that topped the consensus forecasts on Wall Street.
Minneapolis-based Target reported earnings per share (EPS) of $2.57 U.S. versus $2.18 U.S. that had been expected among analysts who cover the company.
Revenue in the period totaled $25.45 billion U.S., which also beat the consensus estimate of $25.21 billion U.S. Sales rose 2% from a year earlier. It was the first time in five quarters that Target posted a positive revenue gain.
The results are a turnaround for Target, which has struggled with sluggish sales and diminished profits since the Covid-19 pandemic began to wane in 2022.
The company’s sales had been hurt as consumers bought fewer items such as clothing and home decor while they paid more for essentials such as food and housing.
Management attributed the strong results and turnaround to consumers buying more discretionary items such as clothing, both in-store and through its online sales channels.
Digital sales drove most of Target’s gains in the latest quarter, rising 8.7% year-over-year as more customers used services such as curbside pick-up and home delivery.
The company has also relaunched its loyalty rewards program and introduced a new paid membership called “Target Circle 360” that includes perks such as free same-day delivery.
Target also announced in May of this year that it was cutting prices on about 5,000 frequently bought items such as diapers and paper towels.
Despite the strong results, Target largely maintained its previous full-year guidance. The company said that it expects comparable sales for this year to range from flat to up 2%.
Target did raise its profit outlook, saying it expects earnings of $9 U.S. to $9.70 U.S., up from a previous guide for $8.60 U.S. to $9.60 U.S. in profit.
Prior to today (Aug. 21), the stock of Target was flat on the year, up 0.86%, and trading at $144.33 U.S. per share.
Related Stories
