Target gets a surprise: More shoppers during the spring
Target got an unexpected boost from an increase in shoppers and an exclusive new line of baby products during the second quarter.
The big-box store chain Thursday raised its estimates for sales and profit in the quarter in a signal to investors that the company is outperforming earlier expectations.
That triggered a flurry of support for Target's stock, which rose nearly 6% to $53.70 at 1 p.m. on Thursday.
After a tough recent stretch that included a blow when online rival Amazon acquired grocery chain Whole Foods, Target regained its footing with Thursday's announcement.
The company said it was now expecting "a modest increase" in second-quarter sales at stores open at least a year. It is also expecting to top its previous per-share earnings projection of $0.95 to $1.15.
“Target’s recent progress reinforces our confidence and commitment to our strategy as we build an even better Target for tomorrow," CEO Brian Cornell said in a statement, pointing to "broad-based improvement in traffic and category sales trends in the second quarter, despite continued challenges in the competitive environment."
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One encouraging result was the success of a new baby products lineup called Cloud Island, which launched in May. Featuring nearly 500 items exclusive to Target, Cloud Island includes nursery decor, bedding and bath goods.
Cornell said Target is planning to launch 12 additional new brands by the end of 2018, including four in the home and apparel sections within the next few months.
The company also reported encouraging early results from a test of a next-day online delivery service for essential household products. The Target Restock program debuted in the company's hometown market of Minneapolis-St. Paul.
Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.