MINNEAPOLIS, Minnesota — Target Corp.’s same-store sales and profit for the first quarter beat Wall Street estimates on Wednesday, benefiting from higher online sales and an increase in shoppers at its stores, sending its up nearly 8 percent in early trading.
Target has been spending more to shore up its same-day delivery with services like Shipt and Drive-up in a bid to better compete with online giant Amazon.com Inc. and brick-and-mortar rival Walmart Inc.
“Over the last two years we have made important investments to build a durable operating and financial model,” Chief Executive Brian Cornell said.
“Target’s first quarter performance and market-share gains demonstrate that the model is working.”
Comparable-store sales rose 4.8 percent, beating analysts’ average estimate of 4.18 percent rise, according to IBES data from Refinitiv.
Target said comparable digital sales grew 42 percent in the quarter, with the same-day delivery services contributing to over half of the sales growth.
Store traffic also grew 4.3 percent in the quarter.
The company’s net earnings rose to $795 million, or $1.53 per share, in the first quarter ended May 4, from $718 million, or $1.33 per share, a year earlier.
Analysts on average were expecting the company to earn $1.43 per share.
Total revenue rose 5 percent to $17.63 billion and topped expectations of $17.52 billion.
By Aishwarya Venugopal; editor: Arun Koyyur.