Target surges after Q2 beat, profit upgrade

21st Aug 2024 11:21

(Sharecast News) - Target shares surged on Wednesday after the US retailer posted better-than-expected second-quarter earnings and lifted its annual profit outlook.

The retailer said total revenue rose 2.7% on the same period a year earlier to $25.5bn, while net income was up 40% to $1.19bn.

Chair and chief executive Brian Cornell said: "We made a commitment to get back to growth in the second quarter, and the team delivered, all while expanding operating margins and growing EPS by more than 40% compared to last year. Importantly, our growth was driven entirely by traffic in stores and our digital channels, with double-digit growth in our same-day delivery services.

"We also saw improving trends across our discretionary categories, most notably in apparel, and we're seeing continued strength in beauty. Looking ahead, even as we maintain the measured outlook that has served us well, we are focused on building on this positive momentum by executing our strategy and providing the unique combination of newness and value that consumers can only find at Target."

Target struck a more cautious note on full-year comparable sales, saying it now expects them to be in the lower half of the guided range for a 0 to 2% increase.

However, based on its "strong profit performance" in the front half of the year, it now expects full-year GAAP and adjusted earnings per share of $9.00 to $9.70, up from previous guidance of $8.60 to $9.60.

At 1445 BST, the shares were up 15.8% at $165.80.