Target Corp (NYSE:TGT) shares rocketed before the bell in New York as the US discount retail giant cruised past analysts' estimates with its third-quarter numbers ahead of the key holiday shopping season.
The company also hiked its full-year profit forecast on the back of strong sales and profitability.
Unlike others in the sector who are flagging, Target is putting its best foot forward, refreshing stores, launching small-format locations in markets like New York and around college campuses. It has also added faster delivery options.
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In the three months to November 2, the firm posted net income of US$714 million, or US$1.39 per share, compared with US$622 million, or US$1.17 per share, in the same period a year ago.
Not including one-time items, Target earned US$1.36 per share, which smashed analysts' expectations of US$1.19 a share.
Revenue for the quarter was US$18.67 billion, compared to the US$18.49 billion, which had been expected.
Same-store sales growth in the period was up 4.5% compared to the 3.6% Wall Street scribes had expected.
Target now expects full-year adjusted earnings to lie between US$6.25 and US$6.45 a share, compared with estimates of US$5.90 and US$6.20 previously. Analysts had expected earnings of US$6.18 per share.
Target has also invested in e-commerce, with the rollout of curbside pickup and same-day deliveries, which has boosted sales and kept the likes of Amazon (NASDAQ:AMZN) at bay.
Online sales rose 31% in the quarter, on top of a 49% rise last year, while same-day fulfillment services, such as order pick up, Drive up and Shipt, accounted for 80% of the group’s digital comparable sales growth.
"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 Brian Cornell, Target's chairman and CEO.
Target’s stock has rallied more than 67% this year.
Shares gained 9.20% in pre-market deals to stand at US$121.04 in New York.
Contact the author at giles@proactiveinvestors.com