News

Digital sales boost Target's Q3 earnings

November 16, 2016

Target is looking forward to the holiday sales season given robust financials in the third quarter thanks to back-to-school season and a boost in digital sales.

Profit for the quarter was $608 million, an11 percent jump from $549 million compared to a year ago. Revenue, however, was down 6.7 percent, hitting $16.4 billion compared to $17.6 billion a year ago. The retailer attributed the decrease to the sell-off of its pharmacy division.

The earnings data is prompting the retailer to raise expectations for Q4.

"We are very pleased with our third quarter financial results, which reflect meaningful improvement in our traffic and sales trends and much stronger-than-expected profitability," said Brian Cornell, chairman and CEO of Target, in a press release. "Favorable gross margin mix and efficient execution by our team drove third quarter EPS performance well beyond our guidance. As we move into the biggest quarter of the year, we are pleased with our inventory position and confident that our team will deliver a great guest experience as they bring our merchandising and marketing plans to life throughout the holiday season."

Target's digital channel sales grew 26 percent and contributed 0.7 percentage points to comparable sales growth.

The earnings insight is clearly being embraced in trading, with shares up 8 percent this morning.