MINNEAPOLIS _ Target Corp. said its profit jumped 9% in the latest quarter, smashing expectations as its investments to make digital shopping easier and more convenient paid off.
Shares jumped 7% in early trading this morning.
Sales at comparable stores and through digital orders from its website and mobile applications grew 4.8%.
Digital sales accounted for a hefty 44% of sales growth _ half of which came from shoppers who picked up their online orders at stores that day or who used the retailer's same-day home delivery service, Shipt.
The Minneapolis-based company said it earned $1.14 billion in the three months ending May 4, the first quarter of its fiscal year. That amounted to a $1.53 a share, well above the expectation of $1.43 of analysts surveyed by Refinitiv.
Revenue grew 5% to $17.6 billion was slightly above analysts' expectations.
The retailer credited continuing investments in store remodels and its ability to quickly fill e-commerce orders with rising traffic.
"Over the last two years, we have made important investments to build a durable operating and financial model that drives consumer relevance and sustainable growth," Target chief executive Brian Cornell said in a statement. "Target's first-quarter performance and market-share gains demonstrate that the model is working."
Retailers that have poured money into digital shopping and providing multiple avenues of getting goods into shoppers hands are showing strong results.
Walmart last week said U.S. sales grew 3.4% during the first quarter and earnings per share of $1.13 blew past analysts expectations of $1.02. However, Kohl's, J.C. Penney and Nordstrom missed expectations during the spring quarter with reports that came out yesterday.
Target expects the pace to continue into the fiscal second quarter. The company forecast comparable sales growth in the low- to mid-single digits, and earnings per share to be between $1.52 and $1.72.
Target maintained full-year guidance of comparable sales growth in the low- to mid-single digits. It expects per-share profit to range from $5.75 to $6.05, a percentage gain in the mid-single digits.
