INTERNATIONAL – Target raised its full-year earnings forecast on Wednesday, signaling a strong holiday season as the retailer benefits from its investments in same-day delivery services and store revamps, sending its shares up 9 percent.
The big-box retailer’s better-than-expected quarterly results and forecast also helped allay fears about the health of the US consumer that were spurred by outlook cuts by a handful of retailers on Tuesday.
The company has posted strong sales growth in the past few years, winning over customers by speeding up delivery through same-day services such as drive-up, click-and-collect and Shipt.
Target’s investments in its same-day delivery services accounted for 80 percent of its digital comparable sales growth, which surged 31 percent in the third quarter. Its store traffic was up 3.1 percent.
“Target is taking share in the discretionary side of its assortment, feasting on the department store and specialty channel, while also having superior consumables prices to Amazon,” JP Morgan analyst Christopher Horvers said.