Target bounces back in Q2

MINNEAPOLIS — Target came roaring back in its second quarter from a year-long sales slump amid evidence that its investments in online and store remodels are paying off. The discounter raised its outlook for the year.



Sales rose 1.6% to $16.43 billion in the quarter ended July 29, beating analysts' estimates of $16.30 billion. Same-store sales rose 1.3%, also more than analysts had expected. Comparable digital sales surged 32%.



Net income fell to $672 million, or $1.22 per share, from $680 million, or $1.16 per share, in the year-ago period. Excluding items, Target reported earnings of $1.23 per share, beating the average analyst estimate of $1.19.



On its quarterly call, Target gave an update on its store remodeling and new store plans. The retailer now plans to remodel more than 300 stores in 2018, up from its original 250.



Target also plans to nearly double the number of smaller-format stores it will open this year, with 15 new locations announced for 2018 and "more to come," CNBC reported.



Target announced its results on the heels of the news that it was acquiring technology transportation company Grand Junction, and that it was expanding its next-day delivery pilot, Target Restock.



In addition, Target is expanding its private label lines, and will launch two apparel brands, a home goods brand and an athleisure brand this fall. More are in the works.



In a statement, Target chairman and CEO said that the company was particularly pleased that second-quarter traffic increased more than 2%, reflecting growth in both its store and digital channels.

  

“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," Cornell said. "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.”



For the full year, Target has forecast earning between $4.34 to $4.54 per share. Analysts had called for earnings per share of $4.39 in 2017, falling on the lower end of Target's updated range.