Target's profit jumped 17% in the second quarter as its store and same-day sales attracted more customers, prompting the retailer to increase its outlook for the rest of the year, the company said Wednesday.
Sales at the company's stores, which have been open for at least one year, rose 3.4% in the second quarter, also exceeding expectations. Target said one-day fulfillment services, including ordering, propulsion and Shipt same-day delivery business, contributed nearly 1.5 percentage points to the same store's overall sales growth.
Target's shares rose 13% in pre-market trading
Here's what Target reported for the fiscal second quarter ended August 3, compared to analysts' expectations based on Refinitiv data:
- Earnings per share: $ 1
- Revenue: $ 18.42 billion versus $ 18.34 billion expected
- Same-store sales: up 3.4% over 2.9% growth expected
] The target and her peers are looking for ways to make shopping more convenient. To compete with Amazon, they are improving their online stores and trying to deliver faster. They also bet that consumers don't mind going to stores, especially when it's faster than waiting for delivery.
"By appealing to buyers through a compelling assortment, a range of performance options driven by convenience, competitive prices and a pleasant shopping experience, we increase Target's appropriateness and deepen the relationship between our guests and our brand," said the CEO of Target Brian Cornell
Net income rose to $ 938 million, or $ 1.82 per share, up from $ 799 million, or $ 1.49 per share, a year ago. This was 20 cents better than expected earnings per share of $ 1.62, based on Refinitiv data.
Total revenue rose 3.6% to $ 18.42 billion from $ 17.78 billion a year ago, with the best estimate being $ 18.34 billion.
Target store sales open for at least 12 months and its website has grown 3.4%, better than 2.9% growth expectations. A year ago, sales in the same store rose 6.5%. Target said traffic grew 2.4% in the last quarter. Meanwhile, digital sales grew 34%, down from a 42% increase in the first quarter.
Like Walmart, Target is expected to see some declines in sales around the 48-hour Prime Day event in early July.  Cornell said the company had "exceptional results" in the first half of 2019, giving it the "confidence" it needed to raise expectations. The target already calls for adjusted earnings per share to fall in the range of $ 5.90 to $ 6.20, which is higher than the previous range of $ 5.75 to $ 6.05.
"Traffic and sales continue to grow," says Cornell.
Target's report comes on the heels of its larger rival Walmart & # 39; s, which last week reported profits that exceeded expectations and also raised its expectations for the year. This is despite the continued threat of additional tariffs coming into effect in the US. " trade war with China.
Analysts largely expect Target to continue to monitor sales gains at the same stores, while other retailers such as department stores struggle to attract traffic. Target also experienced a downtime in the last quarter, but this was not enough to see sales noticeably.
Target's report comes on the heels of its larger competitor Walmart, which last week reported profits that exceeded expectations and raised its forecasts for the year. This is despite the continued threat of additional tariffs coming into effect amid the US trade war with China.
Analysts expect to a large extent the Objective to continue to monitor sales gains at the same stores, while other retailers such as department stores struggle to attract traffic while Target suffered a downtime in the last quarter, which could lead to to the slightest effect on its sales in the same store, traffic is still expected to rise this quarter.
Target this week announced the launch of a new food line called Good & Collect, marking its biggest private label endeavor to date. The merchant invests seriously in incubating his own brands. It is also investing in redesigning stores, opening small formats in major metropolitan areas such as New York, and developing curbs for online orders.
Target shares, whose market cap is $ 44.2 billion, are up over 30% this year.