Since 2017, apart from remodeling its current stores and improving supply chain management, the company hopes to revamp its business model with the extension of small-format stores. Also, investors are optimistic about the company’s fast-growing store traffic and sales growth.
Earnings and sales are expected to jump by 15% and 5% respectively in the whole of 2018. With the holiday shopping season around the corner, an outlook update could cherish investors. Meanwhile, the company depends on its constant sales growth and proper management of costs and expenses to yield better profit growth for the year.
The store traffic is expected to rise considerably for the third quarter as the redesigned stores and competitive pricing have improved the shopping experience. The e-commerce platform will continue to give the desired result for the company in the highly competitive industry.
Target Q2 results top estimates amid record traffic growth; stock rallies
For the second quarter, the 6.4% increase in store traffic drove Target’s top line higher by 7%. The bottom line growth of 19% benefited from the sales growth and lower income taxes. The results also benefited from the merchandising strategies including cost savings initiatives and efforts to improve pricing and promotions.
For the full year 2018, the company had expected adjusted earnings in the range of $5.30 to $5.50 per share. For the year 2019, Target is expected to continue gaining market share in all of its core merchandise categories.
Shares of Target opened higher on Monday but turned negative in the early trade. The stock has risen over 20% in the year so far and over 35% in the past year.