Target Corp.’s stock got a jolt after the retailer said recent store traffic trends left it confident enough to update its guidance for the upcoming quarter.
Shares of the big box retailer rose 2.5 percent in the first minutes of trading in response to Target expecting its second quarter financial results to reflect an increase in comparable store sales as well as an 5 to 9 cent increase in adjusted earnings per share.
Target chairman and chief executive officer Brian Cornell said said traffic and sales trends showed “broad-based improvement” during the first two months of the quarter, after reporting “better than expected” financial results for the first quarter.
The positive signs have come after the retailer decided after a difficult 2016 to make some changes to its operating model over the next two years, including the launch of 12 new brands by the end of 2018, while phasing out some older ones, and a pilot of Restock, a subscription program for next-day delivery of customer essentials.
“Target’s recent progress reinforces our confidence and commitment to our strategy as we build an even better Target for tomorrow,” Cornell said. ““Our team is energized and focused on enhancing and modernizing the Target shopping experience, and our guests are responding.”
When Target revealed its year-end results in February, with sales down 4.3 percent, it projected low single-digit declines comp store declines for 2017.
But Cornell singled out the success of Target’s new baby product line Cloud Island released in May as part of the recent positive trends, and said four more exclusive Target brands of home goods and apparel are set to be released in the next few months.
Line Target has specified for release this summer include Isabel Maternity and children’s line Toca Boca. It’s also said children’s line Cat & Jack, launched last year, is likely to reach $1 billion in annual sales.
As for Restock, Cornell said the company is “pleased with the initial results,” but didn’t say whether the program was going to be expanded beyond its current Twin Cities reach any time soon.
For More, See: