Target (TGT) 3rd Quarter Earnings Stroke 2019, Stock Rise

Target revenue and sales defied analysts' estimates, marking a bright spot in retail after weak reports from department stores JC Penney and Kohl.

The big box retailer also raised profits for the entire year, ahead of the all-important holiday shopping season.

Its shares rose more than 8.5% in premarket trading with the news.

Chief Executive Brian Cornell said the results are "further proof of the sustainability" of Target's investment strategy, which retailer has an "unparalleled package of simple and convenient fulfillment options."

Here is what Target reported for its fiscal third quarter compared to what analysts expected, based on Refinitive data:

  • Earnings per share: $ 1[ads1].36, adjusted, vs. $ 1.19 expected
  • Revenue: $ 18.67 billion versus $ 18.49 billion expected
  • Sales in the same store: 4.5% growth versus 3.6% expected

Target now expects Annual adjusted earnings per share fall within a range of $ 6.25 to $ 6.45, compared to a previous estimate of $ 5.90 to $ 6.20. Analysts had asked for $ 6.18 earnings per share.

Net income during November 2 grew to $ 714 million, or $ 1.39 per share, compared to $ 622 million, or $ 1.17 per share, a year ago. Exclusive disposable items, Target earned $ 1.36 per share, beating expectations of $ 1.19 per share, based on an analytical study of Refinitive.

Total revenues rose 4.7% in the quarter to $ 18.67 billion from $ 17.82 billion the previous year, beating expectations of $ 18.49 billion.

Sales in Target stores opened for at least 12 months and increased 4.5% online, better than expected growth of 3.6%.

The company said that digital sales rose 31% during the quarter, with same-day delivery options including online store purchases and outsourced pickup accounting for 80% of digital sales growth.

The target for traffic during the third quarter was up 3.1%. The average transaction amount grew by 1.4%.

In the fourth quarter, Target said it expected sales in the same store would be up 3% to 4%.

Many analysts have expected Target to head into the holiday season with the wind behind. The company has invested in updating its stores, opening small format locations in urban markets such as New York and around university colleges, launching its own brands – including a new grocery line – and adding faster delivery options thanks to the Shipt platform for same-day broadcasts.

It has partnered with Disney to open mini-Disney stores in some Target stores. It has also teamed up with the parent company of the Toys R Us brand, TRU Kids, to launch the launch and now run

Target said in October that it expects to spend $ 50 million more on wages during the fourth quarter than it did a year earlier, to offer more overtime and increase the number of store workers at the busiest hours this holiday season. 2018 was Target's "most successful holiday in more than a decade," according to Cornell.

Walmart's big-box rival last week reported better-than-expected earnings and lifted the outlook for the entire year, building on the strength of its grocery business.

Target has increased by more than 67% this year. The company has a market share of $ 56.5 billion, compared to Walmart's $ 341 billion.

Read the full press release here.

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