- Target’s stock is on pace to open at a record high on Wednesday after the retailer posted second-quarter earnings that beat Wall Street estimates.
- Sales at existing Target stores climbed 3.4% in the second quarter, boosted by an expansion of the company’s same-day fulfillment offerings.
- The company now expects full-year earnings per share to fall between $5.90 and $6.20, up from a range of $5.75 to $6.05.
- Shares of Target surged 15% on the strong results.
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Target’s stock is set to open at a record high after the retailer reported second-quarter earnings that outperformed Wall Street forecasts. Shares of Target surged more than 17% on the earnings beat.
Here are the key numbers from Target’s second-quarter earnings:
- Revenue: $18.42 billion versus $18.25 billion expected by analysts
- Earnings per share: $1.82 compared to $1.62 estimated by analysts
- Profit: $1.32 billion, up 17% from the same period last year
- Same-store sales: Up 3.4% from last year
Target stores saw a 2.4% uptick in traffic during the second quarter, which helped fuel the increase in same-store sales. The company also said its same-day fulfillment services, including order pick up, drive up, and Shipt same-day delivery, added close to 1.5% of its same-store sales growth.
Revenue from Target’s existing digital channels swelled 34% in the second-quarter, contributing 1.8% to the increase in same-store sales.
"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," Chief Executive Officer Brian Cornell said in a prepared statement.
The retailer’s push into expanding its fulfillment program and bolstering its digital channels is seen as a broader effort to compete with the likes of Amazon and Walmart. Both companies have made aggressive efforts to gain market share in the grocery-delivery space in recent years.
Target also saw its gross margins improve in the second quarter thanks to new merchandising efforts to control costs, pricing, and promotions. The improvement was partially offset by additional costs from its digital fulfillment and supply chain operations.
Following Target’s performance in the second quarter, the company is raising its profit outlook for the year. It now expects full-year earnings per share to fall between $5.90 and $6.20, up from its prior range of $5.75 to $6.05.
Target is up 29.4% through Tuesday’s close.
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