Discount store Target Corp. reported a double-digit increase in sales and earnings for its holiday quarter, thanks to the new tax legislation as well as 3% increase in traffic to its store. However, the company’s expenses were hit by increased compensation costs and an increase in employee wages that impacted profit margins to some extent.
On an adjusted basis, the company’s earnings dipped 5.5% to $1.37 per share and were above the midpoint of the company’s recent guidance range of $1.30 to $1.40.
Comparable store sales jumped 3.6%, driven by higher footfalls to its stores and traffic growth in its digital platform. The comparable store sales for the quarter were also driven by a 4% jump in comp sales in January alone.
For the first quarter of 2018, Target expects a low-single-digit increase in comparable sales, and both reported and adjusted earnings are expected in the range of $1.25 to $1.45.
For full-year 2018, the company forecasts reported and adjusted earnings per share to fall in the range of $5.15 to $5.45. The company anticipates a low-single-digit increase in comparable sales during this period.