Target blows past expectations as digital sales, same-day services boom

Target Corp. reported thriving digital sales and same-day services growth helped fuel a 46% year-over-year spike in third-quarter profit.

The Minneapolis-based discount retailer earned $1.01 billion, or an adjusted $2.79 per share, as revenue rose 21% to $22.34 billion. Wall Street analysts surveyed by Refinitiv were expecting adjusted earnings of $1.60 per share on revenue of $20.93 billion.

Ticker	Security	Last	Change	Change %
TGT	TARGET CORP.	152.16	-1.30	-0.85%

Digital comparable sales soared 155% from a year ago, accounting for 10.9 percentage points of the 20.7% comparable sales growth. Same-day services, which include order pick up, drive up, and Shipt, grew 217%.

“Our strong results in 2020 reflect the benefits of our multi-year effort to build a durable and flexible model, with a differentiated assortment and a suite of industry-leading fulfillment options,” Target CEO Brian Cornell said in a statement.

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Sales increased across all categories with electronics growing more than 50%, home up in the mid-20% range and apparel increasing by almost 10%. The average ticket rose 15.6% from a year ago. Overall, the company said it won $6 billion of market share.

Target declined to provide updated guidance after withdrawing its outlook in the first quarter due to the uncertainties caused by COVID-19.

The company raised its quarterly dividend by 2 cents to 66 cents per share and reinstated its share repurchase program, which has $4.5 billion of remaining capacity.

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Target shares were up 27% this year through Tuesday, outperforming the S&P 500's 18% gain.