By Kimberly Chin
Target Corp. said sales and profit rose in the second quarter, extending the retailer's growth streak as investments in its stores, merchandise and digital capabilities continue to pay off.
The company reported Wednesday a 3.4% rise in comparable sales for the quarter ended Aug. 3. Chief Executive Brian Cornell said Target's sales and traffic were achieved by attracting customers with a compelling assortment, convenience and competitive pricing.
Digital sales jumped 34% from a year earlier.
The company raised its earnings guidance for the year. Target now anticipates earnings of $5.90 to $6.20 a share, up from its previous range of $5.75 to $6.05 a share.
Shares of Target jumped 9.4% in premarket trading as sales were more than Wall Street analysts were expecting.
Discount chains have gained market share in recent quarters, while department stores have struggled to stand out. Walmart reported higher sales in the recent quarter, extending a multiyear streak of growth. Macy's Inc., Kohl's Corp. and J.C. Penney Co. posted disappointing results. Many retailers are also bracing for an increase in tariffs on goods imported from China.
Like other retailers, Target has been spending heavily to adjust to changes in shopping habits and compete with Amazon.com Inc. It has added new brands, expanded its pickup and delivery options, renovated stores and improved its digital capabilities. The retailer has also been benefiting from store closures by Toys "R" Us and others.
Target's second-quarter profit rose from a year earlier to $938 million, or $1.82 a share. Total sales climbed 3.6% to $18.42 billion.
Target said it expects a 3.4% increase for comparable sales in the current quarter as well as the second half of the year, and earnings of $1.04 to $1.24 a share for the quarter.
Write to Kimberly Chin at email@example.com