Target raises profit forecast as online sales power second-quarter beat
FILE PHOTO: An empty shopping cart stands outside a target store during a Black Friday sales event in Westbury, New York, U.S., November 23, 2018. REUTERS/Shannon Stapleton
(Reuters) – Target Corp beat Wall Street estimates for quarterly profit and raised its annual forecast on Wednesday, as higher investments to cater to changing shopping habits lifted online sales and attracted more shoppers, sending shares up 7%.
The company has been spending more to shore up its same-day delivery with services like Shipt and Drive-up in a bid to better compete with online giant Amazon.com Inc and brick-and-mortar rival Walmart Inc.
Robust digital sales drove more than half of the 3.4% growth in same-store sales. Store traffic also grew 2.4% in the quarter.
Analysts on average were expecting same-store sales to grow 3%, according to IBES data from Refinitiv.
The company also raised its full-year adjusted profit forecast between $5.90 and $6.20 per share, compared with the prior range of $5.75 to $6.05.
Excluding certain items, Target earned $1.82 per share, beating analysts’ estimates by 20 cents.
Total revenue of $18.42 billion beat estimates of $18.34 billion.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta