Target on Tuesday posted same-store sales growth of 3.4 percent during the holiday season, topping an expected range of 0 to 2 percent, along with also also raised its fourth-quarter along with also also full-year earnings outlook.
The news comes as retailers across the board, including American Eagle Outfitters, Lululemon, Kohl’s along with also also J.C. Penney, are benefiting via stronger consumer confidence, lower unemployment along with also also higher wages.
Target’s stock gained more than 3 percent Tuesday morning on the news.
“As we look ahead to 2018, we will build on the foundation we established This kind of year by launching additional exclusive brands, enhancing our digital capabilities, opening approximately 30 tiny-format stores along with also also tripling the size of our remodel program to more than 325 stores,” CEO Brian Cornell said in a statement.
The company said tax reform legislation should create additional cash flow in 2018 the idea will use for capital investments, dividends along with also also share repurchases. The brand new tax laws will also boost Target’s profits, similar to an announcement Macy’s made earlier This kind of week.
Target right now expects fourth-quarter adjusted earnings per share to fall within a range of $1.30 to $1.40, compared using a prior range of $1.05 to $1.25. For fiscal 2017, Target is usually calling for adjusted earnings per share of $4.64 to $4.74, compared with previous estimates of $4.40 to $4.60.
Target said fourth-quarter comparable sales should climb closer to 3.4 percent, compared using a prior estimate of 2 percent growth. which would likely mean fiscal 2017 comparable sales rise a little more than 1 percent, compared using a prior forecast calling for as much as 1 percent.
Same-store sales during the November-December months in home, apparel, food along with also also beverage, hardlines along with also also essentials categories all accelerated via the third quarter, Target said.
The company said online sales are on track to grow more than 25 percent in 2017, marking the fourth year Target’s digital business surpasses which milestone.
With one eye on e-commerce, Target has also invested more in its stores, pouring money into both renovating existing locations along with also also rolling out a fleet of smaller-format stores in urban markets. Cornell said Tuesday which Target’s stores fulfilled 70 percent of all digital orders during the holiday season.
“We’ve positioned our stores at the center of a continually expanding suite of convenient fulfillment options,” he said.
Just last month, Target announced plans to acquire grocery delivery service along with also also Instacart competitor Shipt, with the goal of offering same-day delivery of groceries, home furnishings, electronics along with also also some other products, starting as early as This kind of year. Target also recently bought transportation technology company Grand Junction, expanding its last-mile fulfillment capabilities.
“Digital was an undoubted success with robust online growth underpinning performance,” GlobalData Retail Managing Director Neil Saunders wrote in a note to clients.
“However, we also think Target needs to make stores more compelling to ensure which those customers collecting items in shops browse along with also also buy more while doing so,” Saunders said.
Target shares are down about 2.5 percent via a year ago.