Jan 10, 2018
Target lifts profit forecast after holiday sales jump
Jan 10, 2018
The Minneapolis-based chain, whose shares closed up 3 percent at $69.14, raised its fourth-quarter profit forecast to $1.30-$1.40 per share from an earlier range of $1.05-$1.25.
That was well above analysts’ average forecast of $1.22 per share, according to Thomson Reuters I/B/E/S.
Target is slated to have poured $1 billion of last year’s profits into an effort to boost sales, mainly by investing in online business and delivery options to take on Amazon.com Inc.
It has hired more staff, remodeled existing stores and focused on building small-format stores to reach more customers in suburbs.
On Tuesday, the company said same-store sales rose 3.4 percent in November and December and that its online sales growth was on track to report its fourth straight year of more than 25 percent gains.
“Target’s brick-and-mortar customers are growing in their affinity to the Target online interface, pricing on hot products in the fourth quarter and the ability to deliver in time,” Jim Fosina, chief executive of Fosina Marketing Group, said.
The lack of strong retail and online players who sell both toys and electronics is likely to have helped the company keep its loyalists away from Best Buy Co Inc or bankrupt Toys R Us, Fosina said.
Target raised its same-store sales growth forecast for the quarter ending January to 3.4 percent, from a prior forecast of flat to up 2 percent.
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