Target posts best comparable sales growth in 13 years

US retailer raises annual profit forecast after strong demand for home products and toys

Target  raised its annual profit forecast. Photograph:  Brendan McDermid/Reuters

Target raised its annual profit forecast. Photograph: Brendan McDermid/Reuters

 

Target reported its best comparable-sales growth in 13 years and said a strong economy lifted customer visits to the most in a decade, sending its stock to a record high on Wednesday.

The US retailer also raised its annual profit forecast and said its quarterly performance was driven by demand for home products, toys and electronics as well as a rebound in seasonal merchandise sales after cold weather in the first quarter hurt demand.

An extra week of back-to-school spending in the second quarter versus a year earlier along with a one-day sale in July to compete with Amazon.com Inc’s Prime Day, also boosted performance.

Strong consumer environment

Chief executive Brian Cornell said the jump in customer traffic during the second quarter was unprecedented. Store traffic grew 6.4 per cent from a 2.1 per cent gain during the same period a year earlier.

“There’s no doubt that, like others, we’re currently benefiting from a very strong consumer environment, perhaps the strongest I’ve seen in my career,” he said. The retailer recorded market share gains across most categories, he added.

Target has also been helped by the demise of weaker competitors in the past year, including Toys ‘R’ Us and department store operator Bon Ton Store.

– Reuters