Target shares surged by more than 3.5% during pre-market trading on Tuesday after the company posted better-than-expected fourth-quarter financial results.
Revenue for the period was $31.40 billion, outpacing the $30.46 billion that Wall Street predicted. Adjusted earnings per share were also higher than expected, with the retailer’s $1.89 per share exceeding the expected $1.48 per share. Particularly noteworthy was how Target’s same-store sales significantly outpaced estimates, growing 0.7% compared to an expected decline of 1.74%.
CEO Brian Cornell noted that Target’s strong quarterly performance was driven by a customer shift to essential items such as food and beverages, while luxury categories such as electronics, home, and apparel were largely avoided.
“Strength in Food & Beverage, Beauty and Household Essentials offset ongoing softness in discretionary categories,” Cornell noted. “This performance highlights the benefit of our multi-category merchandise assortment, which drives relevance with our guests in any environment, and is a key reason we grew traffic every quarter last year.”
Faced with a challenging economic environment plagued with high prices and inflation, Cornell stated that Target will remain focused on its long term strategy. The company will look to offer affordability and assortment in an effort to attract customers looking for value.