On Wednesday, shares of everyone’s favorite store, Target Corp. (TGT - Free Report) , are soaring, up around 8% to $77 per share in morning trading after the company posted impressive third quarter financial results.
Adjusted earnings per share came in $1.04, surpassing the Zacks Consensus Estimate of 83 cents per share and increasing 22.1% year-over-year. Target reported revenues of $16.441 billion, beating our consensus estimate of $16.3 billion but declining 6.7% year-over-year.
Despite being impacted by a decrease in comparable store sales, as well as the sale of its pharmacy and clinic businesses to CVS Health (CVS - Free Report) , the top line beat reflected an improvement in traffic and sales trends.
While comps fell 0.2%--a smaller-than-expected decline from what analysts were forecasting—comparable digital channel sales surged 26%, adding 0.7 percentage points to comparable sales. The number of transactions at Target for the quarter decreased by 1.2%, but the average transaction amount climbed 1%.
As a result of its robust performance in Q3, Target has raised its outlook for both Q4 and fiscal 2016. The company now forecasts adjusted earnings in the range of $5.10-$5.30 per share for 2016, well above previous expectations of $4.80-$5.20 per share.
For the holiday quarter, Target projects both GAAP and adjusted EPS to be in the range of $1.55-$1.75 per share, while comparable sales should fall in the range of down 1% to up 1%, up from previous guidance of negative 2% to flat.
“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 in a statement.
Target is in a strong position heading into the pivotal holiday quarter, proving it can still entice shoppers to come to its stores. Black Friday, America’s biggest shopping event of the year, is just around the corner, and the Minneapolis-based retailer has already announced great tech and electronics deals, including about $70 off Apple’s (AAPL - Free Report) Apple Watch Series 1. Target is set to bring back many of the promotions it ran last year that pushed its comparable sales higher during the holiday season.
Target’s stores will again open at 6pm Thanksgiving Day, and remain open until 10pm, 11pm, or midnight on Black Friday, depending on the location. The company is also launching its deals on Target.com early Thanksgiving morning.
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