Shares for Target Corp. are surging in premarket trading following the release of third-quarter profits that crushed expectations and a higher guidance for the full year.
As of 8:30 a.m. ET, the big-box retailer’s stock was up more than 10% to $122.20. It logged adjusted earnings per share of $1.36 — a 24.9% gain from the same period in 2018 and much better than analysts’ bets of $1.19. Revenues for the quarter ended Nov. 2 climbed 4.7% to $18.67 billion, trouncing forecasts of $18.49 billion. Profits also soared 14.8% to $714 million.
“Our third-quarter results are further proof of the durability of our strategy, as we’re seeing industry-leading strength across multiple metrics, from the top line to the bottom line,” said chairman and CEO Brian Cornell.
Same-store sales jumped 4.5% on top of last year’s 5.1% — a figure the company pointed out has increased nearly 10% over the last two years. Revenues for Target’s online channels rose 31%, with same-day fulfillment services including buy online, pick up in store as well as curbside pickup and the membership-based Shipt accounting for 80% of its digital comparable sales growth.
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Ahead of the critical holiday shopping season, the Minneapolis-based firm predicts fourth-quarter same-store sales growth of 3% to 4%. For the full year, it upgraded its guidance for adjusted earnings per share of $6.25 to $6.45, compared with the previous range of $5.90 to $6.20.
“Looking ahead, we have ushered in the holiday season with an unwavering commitment to guest service that complements our highly differentiated, value-driven assortment, our exceptional in-store shopping experience as well as an unmatched suite of easy and convenient fulfillment options,” Cornell added.
Target’s report follows disappointing quarterly earnings at fellow chains including Kohl’s. In the past couple years, it has invested more resources into expanding its ship-from-store capabilities to leverage its fleet of 1,855 outposts in the United States, as well as opening small-format stores and campus locations at a time when many competitors are shrinking their footprints.
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