Target's holiday sales jump, in stores and online
MINNEAPOLIS – Target (TGT) has joined other retailers in putting up booming sales numbers as shoppers returned in force during the critical holiday season.
Sales at stores open at least a year jumped 3.4 percent in November and December, with a lot of traffic both on the company's website, and in stores.
The company, also citing recently enacted federal tax changes, raised quarterly and 2017 profit expectations, sending shares up 4 percent in premarket trading Tuesday.
"Target's announcement this morning of holiday performance is consistent with our expectations as we continue to believe that its short-term investments in stores and online capability will generate longer-term benefits, which is borne out by these results," Charlie O'Shea, lead retail analyst with Moody's, said by email.
Kohl's (KSS), Macy's (M) and JCPenney (JCP) have all reported strong holiday sales in the past week, providing more evidence that traditional retailers have learned how to win customers over online, while leveraging the advantages of its physical locations.
At the heart of the retail revival, of course, is the consumer, who is spending more freely than in past years following the recession.
On Monday, the Federal Reserve reported that consumer borrowing jumped 8.8 percent in November, the largest spike in more than two years, with confidence in the U.S. economy growing steadily. The category of debt made up mostly of credit cards vaulted by $11.2 billion, the most in a year, to $1.02 trillion. That's the highest level on record, without adjusting for inflation.
Minneapolis-based Target now foresees fourth-quarter adjusted earnings of $1.30 to $1.40 per share. Its prior guidance was $1.05 to $1.25 per share. For 2017, Target now expects earnings of $4.64 to $4.74 per share. Previously it predicted earnings of $4.40 to $4.60 per share.
Analysts surveyed by FactSet expect fourth-quarter per-share earnings of $1.22, and $4.56 for the full year.
Target expects 2018 adjusted earnings between $5.15 and $5.45 per share.
In premarket trading on Tuesday morning, Target shares were up 4 percent, or $2.65, to $69.83.
