Target Corp reported quarterly profit that surpassed expectations, including its first increase in U.S. same-store sales in four quarters.
The retailer reported a 2.8% gain in revenue to $17.73 billion for the quarter ended November 1, compared with revenue of $17.25 billion in the same period a year ago.
Net income for the quarter stood at $352 million, or $0.55 earnings per share, versus 2013s net income of $341 million, or $0.54 earnings per share.
Analysts at Wall Street projected revenue of $17.6 billion and $0.45 earnings per share.
Target introduced a new apparel display that uses mannequins for its 650 U.S. stores in order to raise sales numbers. The changed comes after the company switched CEOs, currently Target is led by Brian Cornell.
Same-store U.S. sales increased 1.2%, above projections of 0.5% gain, and reaching the companys largest increase in two years. Sales were boosted by strong demand during the back-to-school and Halloween seasons. Online sales climbed 30% and accounted for nearly half of the increase in sales.
“We’re encouraged that the pace of U.S. traffic continues to recover from a very challenging trend earlier this year” CEO Brian Cornell said.
During last years holiday season Target had a security breach, where millions of customer got their credit and debit card information stolen by hackers. Since the attack, the company suffered a total net breach-related expenses of $158 million.
Canadian quarterly sales increased 44% to $479 million, but still ended the three months to November 1 with a loss of $211 million before interest and taxes, up from last years loss of $238 million. With the latest below-the-zero performance, the Canadian unit totals up over $2 billion in losses since it opened last year.
“We know that just to succeed in Canada, we will need a major step change in performance” Mr. Cornell said, while pointing out that operations are improving. Target will decide whether to let its Canadian unit continue to function after the holiday season.
Target projected adjusted earnings to be in the range of $1.13 and $1.23 per share in Q4, while analysts estimated $1.23 a share. The retailer also said it expects full-year earnings per share between $3.15 and $3.25 per share, in its previous forecast the company said full-year earnings to range from $3.10 to $3.30.
Target Inc gained 7.39% on Wednesday and closed at $72.50 in New York, marking a one-year increase of 8.81%. The company is valued at $42.78 billion. According to the Financial Times, the 23 analysts offering 12-month price targets for Target Inc have a median target of $61.00, with a high estimate of $76.00 and a low estimate of $51.00. The median estimate represents a 15.86% decrease from the last price of $72.50.
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