Target Corp. reported third-quarter results on Wednesday that shot past analysts’ estimates. The retailer showed strength across multiple metrics, from the top line to the bottom line, and raised its profit outlook for the full year.

The news bodes well for Target’s performance during the cut-throat holiday season, which has already seen weak reports from J.C. Penney and Kohl’s. The Minneapolis-based retailer said last month that it will spend $50 million on additional payroll to staff its stores during the holiday season. It has a partnership with Disney and a deal with Toys ‘R’ Us to run the toy retailer’s web site. Target in October launched a new loyalty program, Target Circle, to complement its popular Red Card program.

Target shares were up nearly 10 percent in pre-market trading to $121.81.

Net earnings in the third quarter rose 14.8 percent to $714 million, from $622 million in the 2018 third quarter on sales of $18.4 billion, a 4.7 percent increase over the prior year’s $17.6 billion. Target beat the analyst consensus estimate for earnings per share of $1.19, posting $1.36 per share in the 2019 third quarter, 24.9 percent higher than last year’s period.

Third-quarter comp-store sales grew 4.5 percent, on top of a 5.1 percent gain last year. Over the last two years, Target’s comps have risen nearly 10 percent. The comparable sales growth reflects a 2.8 percent increase in stores and a 1.7 percentage point contribution from digital sales.

The retailer’s comparable digital channel sales grew 31 percent in the period, on top of last year’s 49 percent rise last year. Same-day fulfillment services, including order pickup, drive up and Shipt, accounted for 80 percent of Target’s digital comparable sales growth. Third-quarter comparable traffic increase 3.1 percent, driven by gains in stores and digital channels.

Target’s chairman and chief executive officer, Brian Cornell, said the retailer’s third-quarter results show “industry-leading strength….It’s further proof of the durability of our strategy. We’ve ushered in the holiday season with an unwavering commitment to guest service that complements our highly differentiated, value-driven assortment and exceptional in-store shopping experience, as well as an unmatched suite of easy and convenient fulfillment options.”

Target’s third-quarter operating income grew 22.3 percent compared with last year’s period. Third-quarter operating income margin rate was 5.4 percent in 2019, compared with 4.6 percent in 2018. The gross margin rate was 29.8 percent, compared with 28.7 percent in 2018, reflecting the benefit of merchandising efforts to optimize costs, pricing, promotions and assortment, combined with favorable category sales mix. Third-quarter SG&A expense rate was 22.3 percent in 2019, compared with 22.1 percent in 2018, the increase due to higher marketing and compensation costs, partially offset by broad-based cost saving.

For the fourth quarter, Target expects comp-store sales growth of 3 to 4 percent, and EPS of $1.54 to $1.74. The retailer raised its full-year guidance to $6.25 to $6.45 per share, compared with its previous estimate of $5.90 to $6.20. The analyst estimate was $6.18 per share.

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