Shares of Target (TGT – Free Report) jumped 3% in morning trading on Wednesday after reporting better-than-expected second quarter fiscal 2017 results.
Target reported adjusted earnings of $1.23 per share, beating the Zacks Consensus Estimate of $1.20. The company also reported revenue of $16.429 billion, surpassing our estimate by $147 million.
The company’s growing online sales helped Target increase its revenue, with comparable digital sales jumping 32%. The retailer has been making investments to expand its delivery capabilities this past year. Just this week, Target acquired the delivery tech company Grand Junction to help develop a same-day delivery program.
“This continues to be a challenging, competitive… environment [and] that’s why we’re particularly pleased by the ongoing progress we saw on the second quarter,” said CMO Mark Tritton during Wednesday’s earnings conference call.
Despite worries about the state of the retail industry and changing consumer trends, Target saw a growing number of consumers shop at their brick-and-mortar stores. The company credits their 1.3% rise in same-store sales to its store remodeling program. Target finished remodeling 42 stores during the quarter and will now work towards upgrading more than 300 stores in 2018.
Target has also revised its guidance for the rest of 2017. The retail giant expects fiscal 2017 earnings between $4.34 and $4.54, up from $3.80 and $4.20 per share previous projected. Target also expects third quarter earnings to be in the range of $0.75 and $0.95 per share.
“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,” said CEO Brian Cornell. “While our recent results are encouraging, we will continue to plan prudently as we invest in building our brands, our digital channel, and the value we provide our guests.”
Target remains a Zacks Rank #2 (Buy), with a VGM score of ‘A.’
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