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For the last couple of years, Target has been
pouring money into services as it tries to better compete with
online giant Amazon.com Inc and brick-and-mortar rival Walmart
Inc.
With customers increasingly expecting faster deliveries,
Target's services such as Shipt, order pickup and drive-up allow
shoppers to pull into a store and pick-up their orders within
minutes of placing them through the mobile app or website.
These delivery options drove more than 25% of the
better-than-expected 4.8% growth in same-store sales and over
half of its 42% growth in comparable digital sales in the
quarter.
"Throughout this year, we will continue to extend the reach of
our same-day fulfillment options, strengthen our portfolio of
owned and exclusive brands," Chief Executive officer Brian
Cornell said in a statement.
Target's strategy to build on its pricing and digital plans and
open smaller stores in college towns and urban areas helped
store traffic rise 4.3% in the quarter.
"Its 1Q print was one of the strongest thus far this earnings
season and one of best we've seen from Target in quite some
time," Gordon Haskett analyst Chuck Grom said.
The company's net earnings rose to $795 million, or $1.53 per
share, in the first quarter ended May 4. Analysts on average
were expecting it to earn $1.43 per share, according to IBES
data from Refinitiv.
The strong results was followed by a second-quarter adjusted
profit forecast of $1.52 to $1.72 per share, which was largely
above expectations.
Total revenue rose 5% to $17.63 billion in the quarter and
topped expectations of $17.52 billion.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Arun
Koyyur)
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