Customers check out at a Target store on Black Friday in Alexandria, Virginia, USA, 24 November 2017. The day after Thanksgiving known as 'Black Friday' kicks off the holiday season of shopping. Thirty percent of annual retail sales occur between Black Friday and Christmas, according to the National Retail Federation.Black Friday shopping, Alexandria, USA - 24 Nov 2017

Target Corp. survived the bruising 2017 holiday season, and then some.

The Minneapolis-based retailer on Tuesday raised its fourth-quarter and full-year 2018 guidance based on its stronger-than-expected performance over the holiday and recently enacted federal tax reform. The retailer’s results led to comp-store sales growth in the combined November and December period of 3.4 percent, compared with the expected range of 0 to 2 percent. All of the retailer’s core merchandise categories, including home, apparel, food and beverage, hardlines and essentials, posted positive comps and accelerated from the third quarter, reflecting strong traffic growth and continued strength in digital sales.

Target now expects 2017 will be the fourth consecutive year that digital sales post growth of more than 25 percent.

Shares of Target by Tuesday afternoon gained $2.68, or 4.14 percent, to $69.97 on the New York Stock Exchange.

“We’re very pleased with our holiday season performance, which reflects the progress we’ve made against our strategy throughout the year,” said Brian Cornell, chairman and chief executive officer of Target. “We’ve positioned our stores at the center of a continually expanding suite of convenient fulfillment options, [allowing] our stores to fulfill 70 percent of all digital orders in the November/December period.”

Cornell said Target will launch more exclusive brands this year, including Universal Thread, a women’s denim lifestyle brand, launching in February. The retailer plans to open 30 small-format stores and triple the size of its remodel program to more than 325 stores in 2018. The ceo said the company is also focused on rapidly scaling up its new fulfillment options including same-day delivery, which will be enabled by its recent acquisition of Shipt. Target also recently launched a drive-up service.

The company expects adjusted earnings per share of $1.30 to $1.40 in the fourth quarter, compared to its prior range of $1.05 to $1.25. This includes a 6-cent to 8-cent benefit from a lower structural tax rate in January as a result of the recent federal tax reform legislation.

For the full year, Target expects adjusted EPS of $4.64 to $4.74, compared to prior guidance of $4.40 to $4.60. The retailer will report full fourth-quarter earnings on March 6.

The company said it’s planning a low single-digit increase in 2018 comparable sales. While it hasn’t finalized 2018 capital expenditures, Target said the federal tax reform legislation will create additional cash flow for deployment priorities such as capital investments, dividends and additional share repurchase. Target said it expects 2018 adjusted EPS of $5.15 to $5.45.

Gordon Haskett analyst Chuck Grom raised EPS estimates for Target’s fourth quarter to $1.34, from $1.15, and the full year to $4.68, from $4.50, while modeling fiscal 2019 EPS of $5.28. Grom raised the retailer’s price target to $71 per share, from $53 per share.

“We continue to believe that Target’s short-term investments in stores and online capability will generate longer-term benefits, which is borne out by [today’s] results,” said Moody’s lead retail analyst Charlie O’Shea. “The continued leveraging of the store base to facilitate online shopping is a key component of this strategy, and the level of store fulfillment of online orders for holiday is impressive. We believed Target would be a strong performer [during holiday] due to these factors, as well as its growing stable of exclusive product, and these results confirm that view.”