US retailer Target reported better-than-expected first quarter results this week, surpassing analysts' expectations. The company's reported fiscal first-quarter earnings and sales were bolstered by its e-commerce sales, which surged by more than 42 percent.
Target has been heavily focused on improving its online presence, which has now paid off with more of its customers now ordering online through its curbside pickup service.
Following the news of the company's stellar fiscal first-quarter earnings, Target shares jumped by almost 10 percent. Since the start of the year, Target shares are now up by 8.8 percent, boosting the firm's market capitalization to around $39.8 billion.
Despite the threat of higher tariffs for different imported products such as footwear and clothing items,
Target did not change its outlook for 2019. The company's CEO, Brian Cornell, mentioned during its earnings call that Target is still in a good position to deliver strong results during the rest of the year. Target managed to beat investor sentiments this week, following the dismal reports released by other department store chains.
Analysts' forecasts had pegged the firm's earnings per share to be around $1.43, which Target beat with $1.53. Revenues slightly exceeded expectations of $17.52 billion, with the company reporting $17.63 in revenues. Same-store sales were also higher than expected with a 4.8 percent growth overall.
According to the company, some of its best-performing businesses included it's baby and toys business. The particular department apparently outperformed other categories when compared to the previous quarters. This was benefited mostly from the increase in consumer spending during Valentine's Day and Easter.
However, the biggest contributor to the firm's better-than-expected first quarter earnings came from its digital sales, which went up by as much as 42 percent when compared to the previous quarter. Target's online sales now represent 7.1 percent of its total transactions, a big jump from the 5.2 percent it held last year.
Target's launch of various in-house products has also seen a lot of success. The firm recently launched a line of intimate apparel and sleepwear, namely its Stars Above, Colsie, and Auden brands.
The new brands are set to directly compete with well-known but struggling brands such as Victoria's Secret. The company also launched its new line of environmentally friendly cleaning products called Everspring.
Just recently, Target caught the eye of consumers in the United States with the launch of its limited edition apparel and accessories under its Vineyard Vines brand. The products under the brand were an immediate hit, with consumers lining up its stores during its release.
