Target Corporation (NYSE:TGT) was a big mover after reporting monster second-quarter financial results. The stock was up by more than 12% racing to new all-time highs as investors reacted to an 80% jump in profit and an increase in same-store sales as well as online sales.
Target Q2 Results
Target had an impressive second quarter as the COVID-19 pandemic presented a perfect business opportunity on the e-commerce front. The retailer attracted millions of new customers setting the stage for record same-store sales.
Profits were up by 80% to $ 1.7 billion leading to adjusted earnings per share of $3.38, against consensus estimates of $1.62 a share. Revenues came in at $23 billion against $20 billion expected. Online sales and at stores opened at least a year climbed 24%. Same-store sales were also up 10.9% as digital sales nearly tripled, benefiting from a shift in consumer shopping patterns to online.
According to CEO, Brian Cornel, the retailer benefited from a mix of merchandise and online options that resonated well with customers shopping online. In addition, the company benefited from its designation as an essential retailer during the peak of the COVID-19 pandemic that led to lockdowns. With its competitors remaining shut, the retailer was able to see an influx in traffic to its stores as well as online portals.
Online Sales Surge
During the quarter, traffic in stores picked with customers filling up their baskets on fear that lockdowns would last longer. Sales were up across all of the company’s merchandise categories. Electronics sales were the strongest rising by more than 70% as customers bought home office items and video games in response to stay at home restrictions.
Online offerings also continued to elicit strong demand with sales through the curbside pick-up service surging 700%. Sales fulfilled by the online service Shipt were up by more than 350%. The surge in online sales can be attributed to Target, attracting 10 million new digital customers.
However, Target did not provide guidance for the rest of the year. According to the CEO, it is difficult to predict shopping patterns in light of the COVID-19 pandemic. Target is also bracing itself for uncertainty owing to the COVID-19 disruptions.