Target Corp (NYSE: TGT) reported market-beating results for its fiscal second quarter on Wednesday despite a slowdown in sales from COVID highs. Shares of the company were about 4.0% down in premarket trading.
Second-quarter financial performance
Target said its net income in the second quarter printed at $1.82 billion ($3.65 per share) versus the year-ago figure of $1.69 billion ($3.35 per share). On an adjusted basis, it earned $3.64 per share on $25.16 billion of revenue that represents an annualised growth of 9.5%.
According to FactSet, experts had forecast $3.51 of adjusted EPS on $24.99 billion in sales. Same-store sales, as per the retail giant, jumped 8.9% versus 8.8% expected – also lower than the prior quarter.
The news comes a week after Telsey Advisory said Target shares could climb by more than 15%.
Future outlook and share repurchase programme
For fiscal H2, Target forecasts an up to 9% growth in its comparable sales. On the back of strong better than expected performance in Q2, the board of directors authorised a new share buyback programme worth $15 billion.
The American multinational’s digital comparable sales in the second quarter noted a year over year increase of 10% as order pickup and Drive Up remained popular among customers.
Highlights from CEO Cornell’s interview with CNBC’s “Squawk Box”
In his interview with CNBC’s “Squawk Box”, CEO Brian Cornell expressed confidence that Target was seeing continued momentum in the current quarter.
“We’re off to a really strong start in this quarter on back to school/college shopping. We’re not seeing any slowdown in our momentum due to the delta variant. Our consumers are resilient, they’re shopping physically at our stores more, they’re excited about the holiday season as well, and that’s driving strong growth in our business,” Cornell said.
Target’s inventory is up $2.5 billion, which, as per the CEO, indicates that the retailer is not facing issues related to the supply chain either.
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