Target Corp. posted healthy sales for its third quarter, both in stores and offline, but ongoing investments in its store remodeling program and supply chain took a toll on earnings.
Net income grew to $622 million, or $1.17 per share, compared with $478 million, or 87 cents per share, in the year-ago period. Excluding one-time items, Target earned $1.09 per share, missing analysts’ expectations for $1.12 per share.
Total revenue rose 5.6% to $17.82 billion, just topping analysts’ estimates. Same-store sales increased 5.1%, with comparable traffic growth of 5.3%. Comparable digital channel sales surged 49%. Target said its gained market share across all its core categories, with its strongest sales gains coming from the baby, beauty and toy categories.
“Our team delivered another outstanding quarter, driving comparable traffic and sales growth of more than 5% and earnings per share growth of more than 20%," said Brian Cornell, chairman and CEO, Target. “We plan to leverage our current momentum into 2019, when we'll achieve greater scale across the full slate of our initiatives - creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target for profitable growth in the years ahead."
Target unveiled a number of initiatives in the run up to the holiday season, from an expanded focus on toys to the rollout of free, two-day delivery through the holiday shopping season.
“We've made significant investments in our team heading into the holidays and they are ready to serve our guests with a comprehensive suite of convenient delivery and pickup options, a wide range of new products and unique gift ideas and a strong emphasis on low prices and great value,” Cornell stated
For the fourth quarter, Target expects comparable sales growth of approximately 5%, consistent with its year-to-date performance through third quarter 2018. For the full year, the company continues to expect adjusted EPS of $5.30 to $5.50 and GAAP EPS of $5.41 to $5.61.