TGT Target Corp

By Kimberly Chin and Khadeeja Safdar 

Target Corp. said sales and profit rose in the second quarter, sending shares on track for a record, as the retailer extended its growth streak from investments in its stores, merchandise and digital capabilities.

The company reported on Wednesday a 3.4% rise in comparable sales for the quarter ended Aug. 3. Chief Executive Brian Cornell said Target's sales and traffic results were achieved by attracting customers with a compelling assortment, convenience and competitive pricing.

The company raised its full-year earnings guidance, projecting earnings of $5.90 to $6.20 a share, up from its previous range of $5.75 to $6.05 a share.

Shares of Target have soared 19.5% to $102.23 a share in midday trading Wednesday and are poised to eclipse their previous closing high of $89.26 in September 2018. The stock has gained 55% year to date.

Digital sales jumped 34% from a year earlier. Same-day services -- which include in-store pick up, drive up, and delivery -- contributed more than three quarters of its digital sales in the second quarter, up from 20% a year ago.

"Because these options leverage our store infrastructure, technology and teams, same-day fulfillment delivers outstanding financial performance," said Mr. Cornell in a call with analysts.

Mr. Cornell added as the company has shifted its fulfillment from distribution centers to its stores, the costs have gone down by about 40% for regular orders or as much as 90% for same-day orders.

Discount chains have gained market share in recent quarters, while department stores have struggled to stand out. Walmart Inc. reported higher sales in the recent quarter, extending a multiyear streak of growth. Macy's Inc., Kohl's Corp. and J.C. Penney Co. posted disappointing results. Many retailers are also bracing for an increase in tariffs on goods imported from China.

Like other retailers, Target has been spending heavily to adjust to changes in shopping habits and compete with Amazon.com Inc. It has added new brands, expanded its pickup and delivery options, renovated stores and improved its digital capabilities. The retailer has also benefited from store closures by Toys "R" Us and others.

Target's second-quarter profit rose from a year earlier to $938 million, or $1.82 a share. Total sales climbed 3.6% to $18.42 billion.

Target said it expects a 3.4% increase for comparable sales in the current quarter as well as the second half of the year, and earnings of $1.04 to $1.24 a share for the quarter.

Write to Kimberly Chin at kimberly.chin@wsj.com and Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

August 21, 2019 14:13 ET (18:13 GMT)

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