State of the Economy Just Sent Shares of Target Flying to a New High

Big-box retailer Target just reported its second quarter earnings report that had Wall Street cheering and sending shares to a new record high.

The company saw staggering growth in same-store sales for the quarter and foot traffic and according to Target’s CEO Brian Cornell, the consumer environment right now is the best he has ever seen in his career.

Store traffic grew 6.4 percent from a 2.1 percent gain during the same period a year earlier. Same-store sales rose 4.9 percent, beating the 3.99 percent analysts were waiting for.

Excluding one-time items, earnings per share was $1.47, beating analysts’ expectations by 7 cents. Revenue grew to $17.78 billion, topping the average estimate of $17.31 billion.

Target also increased its outlook for the full year, now expecting earnings in the range of $5.30 to $5.50 a share. Previously the range was $5.15 to $5.45.

Target wasn’t the only retailer to benefit from the state of the economy. Walmart, Kohl’s. and TJX also reported strong earnings reports.

“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,” Cornell told analysts.

“We’re seeing a great consumer response … unprecedented traffic. As we go back and look, we’ve never seen traffic growth like this,” Cornell remarked on CNBC’s “Squawk Box.”

Target revealed that digital sales also soared over 40% during the quarter. “On any given day, 90 percent of retail sales are done in physical stores,” the CEO said.

“I think what you’re seeing right now from a macro basis is well-run retailers with strong balance sheets that generate cash … are winning right now,” Cornell explained to analysts. “And there’s obviously others right now that can’t afford to invest in their store experience, or build capabilities or drive differentiation. And they’re giving up share. So there’s clearly winners and losers. We certainly think we’re migrating to the winners column.”

“The consumer is the strongest since ’99,” said Jefferies analyst Randal Konik. “Companies are managing inventories very well, digital investments are paying off, real estate is being rationalized … [Christmas] will be much better than people think.”

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