Target’s second-quarter profit and sales beat estimates

Published on: 23rd August 2018

A strong economy helped to lift customer visits to their highest level in a decade.

Target’s quarterly figures represented the best comparable-sales growth in 13 years, driven by demand for toys and electronics, as well as a rebound in seasonal merchandise. Strong spending during the back-to-school shopping season and a one-day sale in July designed to compete with Amazon Prime Day also boosted performance.

Chief Executive Officer Brian Cornell said the jump in customer traffic during the second quarter was unprecedented; store traffic grew by 6.4%. “There’s no doubt that we’re currently benefiting from a very strong consumer environment, perhaps the strongest I’ve seen in my career,” he said.

Rising wages, lower unemployment and tax cuts are said to have put more money into the pockets of Americans this year.

Target has also been aided by the demise of key competitors in the past year, including Toys ‘R’ Us Inc and department store operator Bon Ton Store Inc. Roughly 4,000 stores in the United States have closed this year, according to Coresight Research.

Target has also cut its next-day delivery fee for household items from $4.99 to $2.99 and is rolling out a new drive-up service where shoppers can pick up orders in an hour.


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