Target Corp. (NYSE:TGT) on Wednesday raised its fourth-quarter sales and full-year guidance after the company’s third-quarter earnings and sales topped analysts’ estimates, showing confidence on the coming holiday season.
The big-box retailer earned $608 million, or $1.06 a share, in the third quarter, compared with $549 million, or 87 cents a share, a year earlier. That beat analysts’ expectations of 86 cents a share. Revenue fell 6.7 percent to $16.44 billion, but still topping analysts’ estimates of $16.3 billion. The company said the declining sales were related to the sale of its pharmacy business to CVS Health Corp. last year and losses on the early retirement debt.
"We are very pleased with our third quarter financial results, which reflect meaningful improvement in our traffic and sales trends and much stronger-than-expected profitability," said Target CEO Brian Cornell.
However, the sales at stores open at least a year declined for a second quarter. Same-store sales slightly dropped 0.2 percent in the period ended Oct.29. The company said the slide wasn’t as severe as executives had warned. Digital sales rose 26 percent during the third quarter, showing that the company is making progress in online sales.
Target raised its fourth-quarter same-store sales guidance, expecting it to be between -1 percent and 1 percent, compared with its previous guidance of down 2 percent to flat. For full-year guidance, the company sees adjusted earnings per share in a range of $5.10 to $5.30, compared with a prior target of $4.80 to $5.20.
"As we move into the biggest quarter of the year, we are pleased with our inventory position and confident that our team will deliver a great guest experience as they bring our merchandising and marketing plans to life throughout the holiday season," Cornell said.