Target on Wednesday reported a bigger-than-expected increase in quarterly profit as revenue got a boost from online sales and strong growth in product categories at the center of its turnaround plan.
Target (TGT), the fourth-largest U.S. retailer, also raised the lower end of its earnings forecast for its fiscal year. It said it expected earnings of $4.65 to $4.75 per share, excluding special items, against its previous outlook of $4.60 to $4.75.
The Minneapolis-based retailer’s shares were up 2.8% at $74.36 in premarket trading. At Tuesday’s close, they had fallen nearly 4% this year.
Excluding special items, earnings came to 86 cents per share in the third quarter ended on Nov. 1, compared with 79 cents a year earlier.
Net sales rose 2.1 percent to 17.6 billion.
Analysts on average expected profit of 85.9 cents per share on sales of $17.57 billion, according to Thomson Reuters I/B/E/S.
Target said sales at stores open at least a year rose 1.9%, beating the market consensus of 1.7%, according to research firm Consensus Metrix.
Digital sales, including online and mobile, increased 20%, contributing 0.4 percentage points to comparable sales growth.
Under CEO Brian Cornell, Target has focused on promoting a narrower set of products, or “signature categories,” that include apparel and items for children, babies, and health and wellness.