Target stock surges after topping earnings and raising profit forecast

Target Corp has reported its first increase in sales in a year, with a 2% rise in same-store sales and a 36% boost in profit. This positive performance has led to a 13% surge in its stock price during premarket trading. The company attributes this growth to its efforts in expanding its offerings of food and essential items, despite facing challenges over the past year due to higher prices and a high-priced merchandise mix compared to competitors like Walmart. Target's stock, however, remains flat for the year, trailing the S&P 500.

The retailer has also raised its annual profit forecast for 2024 to a range of $9.00 to $9.70 per share, up from the previous range of $8.60 to $9.00. This adjustment comes after beating Wall Street expectations for second-quarter sales and profits. CEO Brian Cornell highlighted that shoppers responded positively to price cuts and the expanded range of everyday essentials and private-label food items. This development has led to improved shopping habits among consumers. The company’s adjusted earnings of $2.57 per share for the three months ending in July exceeded forecasts by nearly 40 cents, with total sales of $25.45 billion surpassing expectations.