Target on Tuesday posted same-store sales that climbed 3.4 percent during the holiday season, topping an expected range of 0 to 2 percent, and raised its fourth-quarter and full-year earnings outlook.
The big-box retailer’s stock was up more than 4 percent during premarket trading on the news.
“We’ve positioned our stores at the center of a continually expanding suite of convenient fulfillment options and made significant investments in our team, which enabled our stores to fulfill 70 percent of all digital orders in the November/December period,” CEO Brian Cornell said in a statement.
“As we look ahead to 2018, we will build on the foundation we established this year by launching additional exclusive brands, enhancing our digital capabilities, opening approximately 30 small-format stores and tripling the size of our remodel program to more than 325 stores,” he added.
Target now expects fourth-quarter adjusted earnings per share to fall within a range of $1.30 to $1.40, compared with a prior range of $1.05 to $1.25. For fiscal 2017, Target is 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 with a prior estimate of 2 percent growth. That would mean fiscal 2017 comparable sales rise a little more than 1 percent, compared with a prior forecast calling for as much as 1 percent.
Same-store sales in its home, apparel, food and beverage, hardlines and essentials categories all accelerated from the third quarter during the November and December months, Target explained.
The company added online sales are also on track to grow more than 25 percent in 2017, marking the fourth year Target’s digital business surpasses that milestone.
About this time last year, Target lowered its fiscal 2016 profit forecast after it reported a decline in comparable sales for November and December, where higher online sales were overshadowed by intense price competition through the holidays.
Lately, Target has made more of an effort to invest in its stores and has been pouring money into both renovating existing locations and rolling out a fleet of smaller-format stores in urban markets.
Just last month, Target announced plans to acquire grocery delivery service and Instacart competitor Shipt, with the goal of offering same-day delivery of groceries, home furnishings, electronics and other products, starting as early as this year. Target also recently bought transportation technology company Grand Junction, expanding its last-mile fulfillment capabilities.