Target lifts profit forecast after holiday sales jump

(Reuters) - Target Corp <TGT.N> reported strong same-store sales for November and December on Tuesday, more customer visits and higher online sales, putting the United States' second largest mass retailer on track for the best quarter in five years.

Shares of the Minneapolis-based chain rose 4.2 percent in premarket trading and were set to open at a near one-year high of $70, gaining steam after also raising its profit forecast.

The most popular stores in America:

50 PHOTOS
The most popular stores in America
See Gallery
The most popular stores in America

ALABAMA: Target 

Photo credit: Reuters 

ALASKA: Walmart

Photo credit: Reuters 

ARKANSAS: Target 

Photo credit: Reuters 

ARIZONA: Walmart 

Photo credit: Reuters 

CALIFORNIA: Target  

Photo credit: Getty

COLORADO: Target 

Photo credit: Reuters 

CONNECTICUT: Target 

Photo credit: Reuters 

WASHINGTON, D.C.: Macy's 

Photo credit: Reuters 

DELAWARE: Target 

Photo credit: Reuters 

FLORIDA: UNIQLO 

Photo credit: Reuters 

GEORGIA: Target 

Photo credit: Reuters 

HAWAII: Walmart 

Photo credit: Reuters 

IOWA: Target

Photo credit: Reuters 

IDAHO: Fred Meyer 

Photo credit: Getty

ILLINOIS: UNIQLO 

Photo credit: Getty

INDIANA: Target 

Photo credit: Getty

KANSAS: Target 

Photo credit: Getty

KENTUCKY: Target 

Photo credit: Getty

LOUISIANA: Target

Photo credit: Getty

MASSACHUSETTS: Primark 

Photo credit: Reuters 

MARYLAND: Walmart

Photo credit: Reuters 

MAINE: Target 

Photo credit: Reuters 

MICHIGAN: Walmart 

Photo credit: Reuters 

MINNESOTA: Target 

Photo credit: Getty 

MISSOURI: Target

Photo credit: Shutterstock 

MISSISSIPPI: Target 

Photo credit: Getty

MONTANA: Walmart

Photo credit: Getty 

NORTH CAROLINA: Target 

Photo credit: Reuters 

NORTH DAKOTA: Target 

Photo credit: Reuters 

NEBRASKA: Target 

Photo credit: Reuters 

NEW HAMPSHIRE: Walmart 

Photo credit: Reuters 

NEW JERSEY: Target 

Photo credit: Reuters 

NEW MEXICO: Walmart 

Photo credit: Reuters 

NEVADA: Walmart 

Photo credit: Reuters 

NEW YORK: Bloomingdale's 

Photo credit: Reuters 

OHIO: Walmart

Photo credit: Reuters 

OKLAHOMA: Target 

Photo credit: Reuters 

PENNSYLVANIA: Walmart 

Photo credit: Reuters 

RHODE ISLAND: Target 

Photo credit: Reuters 

SOUTH CAROLINA: Walmart 

Photo credit: Getty 

SOUTH DAKOTA: Walmart 

Photo credit: Getty 

TENNESSEE: Target 

Photo credit: Getty

TEXAS: Target 

Photo credit: Getty 

UTAH: Walmart 

Photo credit: Getty

VIRGINIA: Bloomingdale's

Photo credit: Reuters 

VERMONT: Walmart 

Photo credit: Reuters 

WASHINGTON: Fred Meyer 

Photo credit: Getty 

WISCONSIN: Target 

Photo credit: Getty 

WEST VIRGINIA: Walmart 

Photo credit: Reuters 

WYOMING: Walmart

Photo credit: Reuters 

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Target poured $1 billion of its profits into an effort to boost sales last year, mainly by investing in its online business and delivery options to take on Amazon.com <AMZN.O>.

It also hired more staff, remodeled existing stores and focused on building small-format stores to reach more customers in suburbs.

STOCK PRICE FOR TGT

Full price information

On Tuesday, the company said same-store sales rose 3.4 percent in November and December.

"Target invested heavily in holiday 2017, ramping up its hiring to 100,000 - well above year ago levels - as well as (investing) in new brands," Retail Metrics President Ken Perkins said. "It was a strong holiday (for them)."

The retailer raised its same-store sales growth forecast for the quarter ending in January to 3.4 percent from a prediction of up to 2 percent growth earlier.

Perkins said that, if met, that would be Target's strongest quarterly gain since the first quarter of 2012.

"Our holiday season performance reflects meaningful investments in our team, increasing wages, staffing and training to deliver elevated service and expertise," Target Chief Executive Brian Cornell said in a statement.

Target is the latest in a run of relatively upbeat holiday sales numbers from brick-and-mortar retailers who have suffered most from the huge gains made by Amazon.com <AMZN.O> and other online retailers over the past decade.

Shares of department store chain Kohl's on Monday surged after it reported a 6.9 percent rise in same-store sales for the same months.

Target said same-store sales in November and December saw strong gains in all five of its core merchandise categories: home, apparel, food & beverage, hardlines and essentials.

Kitchen items from brands like Threshold, KitchenAid and Keurig, and cordless vacuums from Roomba and Dyson were popular gifting items. An exclusive furniture and household goods brand co-designed by TV personalities Chip and Joanna Gaines was a hit after launching in November, the company said.

Target expects fourth-quarter adjusted earnings of $1.30 to $1.40 per share, compared with a previous forecast of $1.05 to $1.25.

The forecast includes a 6 cent to 8 cent benefit from the newly-approved reduction in corporate tax rates.

Analysts on average expect a profit of $1.22 per share, according to Thomson Reuters I/B/E/S.

 

(Reporting by Siddharth Cavale and Vibhuti Sharma in Bengaluru; Editing by Bernard Orr)

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.