Target Corporation (NYSE: TGT) stock gained more than 5.5 percent on Wednesday morning after the company reported record traffic growth and beat Wall Street expectations for earnings and revenue. Analysts say there was a lot for investors to like about Target’s second-quarter rebound.
Target reported adjusted earnings per share of $1.47 on revenue of $17.78 billion. Both numbers topped consensus analyst estimates of $1.40 and $17.28 billion, respectively. Revenue was up nearly 7 percent from a year ago.
Same-store sales were up 6.5 percent, well above the 4 percent growth analysts had expected. Same-store sales growth was driven by a 6.4 percent surge in store traffic, the largest year-over-year gain since Target began reporting the metric in 2008. Even average transaction size was up 0.1 percent in the second quarter.
Digital sales were up 41 percent on the quarter but still represented just 5.6 percent of total sales.
In a statement, Target says its same-store sales growth and its traffic growth were the highest the company has seen in over a decade.
“As we look ahead to 2019, we expect to achieve scale across the full slate of our initiatives — creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target to continue gaining market share,” CEO Brian Cornell says.
Looking ahead, Target issued third-quarter EPS guidance of between $1 and $1.20 and same-store sales growth guidance of 4.8 percent. Target also raised its full-year EPS guidance from a previous range of between $5.15 and $5.45 to a new range of between $5.30 and $5.50. Target is also now forecasting full-year same-store sales growth of 4.8 percent after previously calling for low-single-digit growth.
Bank of America analyst Robert Ohmes is particularly impressed by Target’s guidance, which was significantly higher than his expectations.
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