Shares for Target Corp. soared in the high single-digits in Wednesday premarket trading after the company posted blowout second-quarter earnings and sales.
The big-box chain logged adjusted earnings per share of $3.38 — 85.7% higher than the prior year period and significantly better than analysts’ anticipated $1.62 a share — even as solid operating performance was offset by investments in employees’ pay and benefits.
Revenues also soared 24.7% to $23 billion, trouncing expectations of $20.09 billion. The company added 10 million new digital customers in the first half of the year and recorded e-commerce growth of 195% in the three months ended Aug. 1 as coronavirus-induced stay-at-home orders drove shoppers online.
As of 9:15 a.m. ET, its stock was up 8.3% to $148.24.
According to chairman and CEO Brian Cornell, Target’s Q2 comps improvement of 24.3% is “the strongest we have ever reported.” In-store same-store sales also rose 10.9%, while the company saw “unusually strong market-share gains” across all of its core merchandise categories. (It said it gained approximately $5 billion in market share in the first half of the year.)
What’s more, the Minneapolis-based retailer shared that its same-day fulfillment offerings expanded 273% in the quarter. Its fastest growth was seen in the Drive Up service, which surged more than 700%, as consumers across the country sought curbside pickup in hopes of avoiding the highly-contagious coronavirus. Year-over-year sales fulfilled by its Shipt service also increased upwards of 350%, while in-store pickup sales rose 60%.
Order pickup has been in Target stores for the last five years. In the statement, the company said that more than 90% of its Q2 sales growth involved its outposts — whether a shopper’s order was purchased at the register, placed in their cars or shipped from stores.
“With our differentiated merchandising assortment, a comprehensive set of convenient fulfillment options, a strong balance sheet and our deeply dedicated team,” Cornell added, “we are well-equipped to navigate the ongoing challenges of the pandemic and continue to grow profitably in the years ahead.”
During the first quarter, the company withdrew its fiscal-year guidance in light of uncertainties stemming from the ongoing health crisis.