Investing.com - Shares in Target (NYSE:TGT) jumped 6% in premarket trade Tuesday as fourth-quarter comparable sales topped expectations and the company forecast better-than-expected annual profit.
Promotional offers drove comparable sales up 5.3%, beating the consensus estimates of 5.1%. Online sales contributed 2.4% to the overall comparable sales number as Target pushes its strategy to improve its digital footprint.
The retailer also reported adjusted earnings per share of $1.52 on revenue of $22.98 billion. Analysts surveyed by Investing.com had forecast an EPS of $1.53 with sales of $22.92 billion.
Looking ahead, Target forecast an adjusted EPS of $5.75 to $6.05 for 2019, topping the Capital IQ consensus of $5.64. It also expects a low- to mid-single digit increase in comparable sales and a mid-single digit increase in operating income.
Target’s $7 billion plan to revamp stores and upgrade its digital footprint is rapidly coming to the end of its three-year deadline in 2020.
CEO Brian Cornell backed the move in 2017 in a push to improve the customer experience via a better alignment of digital and physical access, remodeling more than 1,000 locations to include a “grab-and-go” option for those customers in a hurry, as well as a bet for smaller stores in urban areas.
Like most brick-and-mortar retailers, Target has struggled with not only its bigger rival Walmart (NYSE:WMT), but with Amazon.com's (NASDAQ:AMZN) move into the sector.
Amazon, which bought the Whole Foods chain for $13.7 billion in 2017, was reported last Friday to be studying a plan for a new line of grocery stores across the U.S. that would dramatically expand its food business and also strengthen its presence in beauty and personal care.