Target Corp shares rose 5% after the retailer reported stronger second-quarter sales, higher traffic and a sharp jump in earnings, helped by broad-based demand across stores, digital channels and key merchandise categories.
The company said second-quarter net sales grew 5.3% from a year earlier, while comparable sales rose 3.8%. The comparable sales growth was driven mainly by a 3.6% increase in traffic, showing that more shoppers visited Target during the quarter.
On a two-year basis, net sales grew at a compounded annual growth rate of 2.1%, which was 30 basis points higher than the previous quarter.
The company said the sales strength was broad-based across channels, customer groups, product categories and throughout the quarter. Store comparable sales rose 2.7%, while digital comparable sales increased 8.7%. Same-day delivery grew more than 25%, leading the digital growth.
All six core merchandising categories reported sales growth from a year earlier. Fun 101 grew in double digits, while Food & Beverage and Beauty posted high single-digit growth.
Target has been trying to improve customer traffic by focusing on style, design, new products and value. The company said it has lowered prices on more than 10,000 items over the past year.
Non-merchandise sales rose more than 20%, helped by growth in Roundel advertising revenue, Target Circle 360 membership revenue and the Target+ marketplace.
Second-quarter GAAP and adjusted earnings per share stood at $4.11, compared with $2.05 a year earlier, an increase of 100%. The number included tariff refund benefits of $1.65 per share. Excluding those refunds, GAAP and adjusted EPS rose 20% year-on-year.
