Dive Brief:
-
Target released its Q2 report Wednesday and handily beat expectations. Same-store sales increased 2.4%, where expectations were a smidgen below at a 2.3% increase.
-
Similarly, Q2 revenue rose $17.43 billion, above the estimate of $17.4. Same-store sales in what the retailer calls signature categories (Style, Baby, Kids and Wellness) grew three times faster than the company average, and same-store sales grew 4% to 5% in Home and Apparel. Digital sales increased 30%, contributing 0.6 percentage points to same-store sales growth, the company said.
-
The retailer boosted its expectations for the year, saying that adjusted earnings per share would be between $4.60 and $4.75, above its previous estimate of $4.50 and $4.65.
Dive Insight:
It would be tempting to say that Target is hitting its stride—much of its restructuring under CEO Brian Cornell is underway, with corporate job cuts and executive suite reshuffles mostly behind it. The company has even taken significant steps to redress the massive breach in 2013 that has been such a setback to its sales and reputation.
"We’re very pleased with our second quarter financial results, as traffic growth, strong sales in our signature categories and continued expense discipline drove better-than-expected profitability," Cornell said in a statement Wednesday.
Quarterly reports in recent days have been a series of contrasting fortunes among retailers, with some struggling while others appearing to move beyond the retail funk of the past several quarters.
Target, like Nordstrom and J.C. Penney, for example, have reported upbeat results, while Macy’s and Wal-Mart appear to have longer-term challenges in front of them. Most notably, Target’s Wednesday numbers appear to show that its investments in e-commerce and omnichannel initiatives, its restructuring (including at the very top), and its merchandising changes are all beginning to pay off in a significant way. The retailer raised its outlook for the second straight quarter.
