Target Sees Profits Jump 80% in Blow Out Second Quarter

Big box retailer Target reported second quarter financial results this week revealing profits that jumped 80% and same-store sales setting a new record.

For the quarter, Target’s sales online and at stores open for at least a year climbed by 24.3%. This was an all-time high for the company and beat the 7.6% expected according to a StreetAccount survey.

The retailer’s curbside pickup service jumped more than 700%. Same-store sales climbed by 10.9% while the company’s digital sales nearly tripled from a year earlier.

Target reported Adjusted EPS of $3.38 for the quarter compared to just $1.62 expected. Revenue at $23 billion was ahead of the $20.9 billion expected.

CEO Brian Cornell said Target had 10 million new digital customers and picked up $5 billion in market share in the first half of the year.

“Throughout the year and over the last few years, we’ve built tremendous trust with the guest,” he said on the earnings call. He said that relationship with customers has “been one of the big drivers behind our success.”

He also said, “When you look beneath the surface of the reported numbers, you find that our stores actually drove more than 90% of our second-quarter growth given that they enabled more than three-quarters of our digital sales and an even higher percentage of our digital growth. Store-based fulfillment is uniquely suited to our business model because of the way it fits within our overall strategy. In particular, it aligns with our merchandising approach, which is based on curation, both in our stores and online assortments. As a result, the majority of our digital demand is driven by items that are already available in our stores, which positions us to efficiently rely on those locations to fulfill the demand. Among our store-enabled digital fulfillment options, we continue to see the most rapid growth in our same-day offerings in store pickup, Drive Up and Shipt. These services offer speed, reliability, convenience and value to our guests. They are digital capabilities enhanced by human interaction, even though they’re contactless.”

He added, “This explains why they generate some of the highest levels of satisfaction of anything we provide. Together, our same-day services saw more than 270% comp growth in the second quarter, outpacing overall digital growth. Among these services, we saw the fastest growth in Drive Up, which grew an astonishing 734%. We also saw incredible growth in Target sales fulfilled by Shipt, which were up more than 350%.”

Shares of the stock were up almost 13% on Wednesday after the results and hit a new 52-week high of $154.69.

Disclaimer: We have no position in Target Corporation (NYSE: TGT) and have not been compensated for this article.