Target said Wednesday its profit jumped 17% during the second quarter as its in-store pickup and same-day shipping services lured more customers, and it raised its outlook for the rest of the year. Sales at the company’s stores that have been open for at least a year grew 3.4% during the quarter, also exceeding expectations. Target said same-day fulfillment services, including order pickup, drive up and Shipt same-day delivery business, contributed nearly 1.5 percentage points of its overall same-store sales growth.
- Earnings per share: $1.82 vs. $1.62 expected
- Revenue: $18.42 billion vs. $18.34 billion expected
- Same-store sales: up 3.4% vs. growth of 2.9% expected
Target and its rivals are searching for ways to make shopping more convenient. To compete with Amazon, they are improving their online stores and trying to ship faster. They are also focusing that consumers do not mind visiting stores, especially when it’s faster than waiting for delivery.
“These options offer speed, convenience and reliability,” Target CEO Brian Cornell told analysts on a call Wednesday. “And as a result, they’re quickly becoming the fulfillment choices for our guests. And most importantly, because these options benefit our existing in-store infrastructure, technology and teams, same-day fulfillment delivers outstanding financial performance as well.”
Net income rose to $938 million, or $1.82 a share, compared with $799 million, or $1.49 per share, a year earlier. That was 20 cents better than expectations for earnings per share of $1.62, based on Refinitiv data.Total revenue grew 3.6% to $18.42 billion from $17.78 billion a year earlier, topping estimates for $18.34 billion.
Sales at Target stores open for at least 12 months and from its website were up 3.4%, better than expectations for growth of 2.9%. A year earlier, same-store sales climbed 6.5%. Target said footfall was up 2.4% during the latest quarter. Digital sales surged 34%, down from a 42% increase during the first quarter.