MINNEAPOLIS – Following a year of dismal numbers, sales have started to pick up for Target Corporation.
On Wednesday, Target announced an increase in second quarter comparable sales. From May to July, sales rose 1.3 percent for the Minneapolis-based retailer. The increase, an improvement from the 1.1 percent decline during the same quarter last year, was driven primarily by an increase in online sales. A moderate increase in foot traffic also helped boost sales.
Target also raised its fiscal year outlook, expecting a profit of $4.34 to $4.54 a share instead of previous predictions of of $3.80 to $4.20. The positive news sent Target’s stock up 4.9 percent in premarket trading.
Target CEO Brian Cornell called the results “encouraging,” saying the company plans to continue improving their brand.
“We continue to focus on our long-term strategy, as we work to transform every part of our business and build an even better Target that will thrive in this new era in retail,” Cornell said in a statement. “While our recent results are encouraging, we will continue to plan prudently as we invest in building our brands, our digital channel, the value we provide our guests and elevating service levels in our stores.”
Target recently announced a plan to invest $7 billion to remodel stores and lower prices over the next three years. With the positive second quarter sales numbers, the company plans to accelerate the pace of the store remodels. On top of the 110 stores on track to receive a facelift this year, Target plans to update 300 stores in 2018, up from 250.
Target also plans to roll out 12 new brands in the next 18 months while phasing out older brands like Merona and Mossimo. Four of the new private label apparel and homewares brands will be available this fall.
Target has been struggling to post positive sales numbers since last spring. On April 19, 2016, Target’s stock price closed at $83.98 per share, an all time high for the company. That was the same day the company announced its transgender inclusive bathroom policy. Since then Target’s stock price fell dramatically. On July 11, the price closed at $50.18, the lowest mark the company has recorded since January 27, 2012.
Following the positive second quarter numbers, Target’s stock closed at $56.31 on Wednesday. Going into the second half of its fiscal year, the company’s comparable sales are expected to match the growth of the first two quarters.