More customers buying in all six of Target’s main merchandising categories helped deliver the better-than-expected sales, the company said. Comparable sales — those coming from stores and digital channels operating for at least 12 months, rose 5.6% in the three-month period ended May 2. It was the biggest gain since early 2022, and the first positive read after three consecutive quarters of negative comparable sales.

The retail chain also raised its annual revenue outlook, saying it expected the momentum to continue the rest of the year.

Shares rose 1.6% before the opening bell Wednesday.

Target CEO Michael Fiddelke, a 20-year company veteran who became the struggling retailer’s chief executive in February, said he remained guardedly optimistic given where the company is in its operational overhaul.

“We’re encouraged to see a strong guest response so far,” Fiddelke told reporters Tuesday, adding: “We’re maintaining a cautious outlook given the work we know we have in front of us and ongoing uncertainty in the macroeconomic environment.”

He and other Target executives presented investors in early March with a $6 billion plan to reverse three straight years of sales declines by remodeling stores, reclaiming the chain’s reputation for stocking stylish clothing for shoppers on a budget, and improving store staffing and worker training.

New collaborations with labels like Roller Rabbit, an apparel and home goods brand known for its whimsical, block-print designs, resonated with shoppers, company executives said. An expanded selection of toys costing under $10 also was popular, Fiddelke said.

Target is one of the first big major retailers to report financial results covering the February through April period. Analysts will be interested in hearing any comments from executives on whether consumers have changed their shopping due to surging gasoline prices fueled by the Iran war.

However, the discount chain was struggling well before the war, losing ground to rival Walmart. Customers complained of disheveled stores that lacked the fashionable yet affordable niche that had earned Target the nickname “Tarzhay.”

Fiddelke has been making changes in hopes of drawing shoppers back. He reshuffled the leadership team at Target, increased spending on store staffing and made cuts at distribution facilities and regional offices. On Tuesday, Target named a former Walmart executive as its new head of supply chain as it tries to address another problem that hurt sales: unreliably stocked store shelves.

The company also has focused on overhauling categories where it lost market share, including home goods and clothing. For example, 75% of the company’s decorative home accessories, including pillows and candles, will be new, the company said in early March.

Beyond its stores, Target also took a hit to its reputation in the last two years. The company’s decision to roll back diversity, equity and inclusion initiatives led to protests and boycotts.

Target became a flashpoint again this year when Minneapolis, the city where the retailer has its headquarters, became the center of an immigration crackdown. Local activists wanted the company to take a public stand against the Trump administration surging federal agents into the city, especially after two residents participating in protests were killed.

Fiddelke was one of 60 CEOs of Minnesota-based companies who, in the wake of a protester’s death, signed an open letter in January “calling for an immediate de-escalation of tensions and for state, local and federal officials to work together to find real solutions.”

In early March, Fiddelke acknowledged in an interview with The Associated Press that boycotts impacted Target’s sales. He said Tuesday that the increased store traffic during the first quarter was broad-based across regions and types of customers.

Target posted first-quarter earnings of $781 million, or $1.71 per share, for the three-month period ended May 2. That compares with $1.04 billion, or $2.27 per share, in the year-ago period.

Adjusted earnings results were $1.71 per share.

Net sales rose 6.7% to $25.44 billion.

Analysts were expecting $1.47 per share on sales of $24.7 billion, according to FactSet.

For the full year, Target said it expected earnings per share to end up near the high end of $7.50 to $8.50, the guidance it offered in March. Analysts are expecting $8.12 per share for the year, according to FactSet.

Target said it now expects net sales growth to be up 4% for the year, up from the previous forecast of 2%. That would bring sales to $108.97 billion.

Analysts project annual sales of $107.15 billion for the year, according to FactSet.