Target shares rise on better-than-expected second quarter

 
Alys Key
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Target Corp. Reported A 4 percent increase in second-quarter profits
Target beat expectations in the second quarter (Source: Getty)

Target's shares jumped three per cent today after the US retailer unveiled higher-than-anticipated sales.

The figures

Sales in the second quarter rose 1.6 per cent to $16.43bn (£12.8bn), above estimates of $16.3bn.

This was partially down to more visitors to both the physical store estate and the online store. Overall traffic to bricks-and-mortar and digital stores grew 2.1 per cent.

Sales through digital channels jumped 32 per cent compared to the same period last year.

But earnings before interest expense and income taxes were down 10.3 per cent to $1.1bn from $1.2bn this time last year.

Shares were trading up 3.15 per cent today at $56.06

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Why it's interesting

Target has been on the backfoot against bigger competitors Amazon and Wal-Mart over the past year. But now it has gained the upper hand as one of few retailers to adjust its full year guidance upwards.

Its turnaround plan, announced in March, involved cutting $1bn from profit margin in order to compete on prices with other retailers.

The group also said earlier this week that it would acquire delivery logistics company Grand Junction to help ramp up the availability of same-day delivery, as it aimed to hold its own against online retail giants.

What the company said

Brian Cornell, chairman and CEO of Target said: “We continue to focus on our long-term strategy, as we work to transform every part of our business and build an even better Target that will thrive in this new era in retail. While our recent results are encouraging, we will continue to plan prudently as we invest in building our brands, our digital channel, the value we provide our guests and elevating service levels in our stores.”

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