Target surges 18% to record high after smashing forecasts and raising profit outlook
- Target's stock opened at a record high on Wednesday after the retailer posted second-quarter earnings that beat Wall Street estimates.
- Sales at 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 as much as 18% on the strong results.
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Shares of Target soared as much as 18% to a record high on Wednesday after the retailer reported second-quarter earnings that outperformed Wall Street forecasts.
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 with $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 pickup, drive-up, and same-day delivery — added close to 1.5 points of its same-store sales growth.
Revenue from Target's digital channels swelled 34% in the second quarter, contributing 1.8 points 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," CEO Brian Cornell said in a 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 said it also saw its gross margins improve in the second quarter thanks to new merchandising efforts to control costs, pricing, and promotions. It said the improvement was partially offset by additional costs from its digital-fulfillment and supply-chain operations.
Following its performance in the second quarter, Target raised its profit outlook for the year. It 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.
Target is up 29.4% through Tuesday's close.
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