Target hit a bullseye in the second quarter as an explosion of online shopping led the department store giant to record sales growth.
The Minneapolis-based chain on Wednesday reported a 24.3 percent spike in comparable sales for the three months ending Aug. 1 — its biggest quarterly increase on record — driven by a massive 195 percent surge in digital comparable sales.
The sales helped Target’s total revenues grow 24.7 percent from the year-earlier quarter to nearly $23 billion while earnings per share climbed 84.4 percent to $3.35, blowing out Wall Street’s estimates for $19.8 billion in revenue and earnings of roughly $1.60 per share, according to Bloomberg data.
Target said its stores played a key role in its blowout quarter, fulfilling more than 90 percent of the total sales — even as consumers showed a strong preference for alternatives to in-store shopping amid the coronavirus pandemic.
The company pointed to its 273 percent growth in services that let customers pick up online orders at a store or have them delivered the same day, which accounted for about a quarter of the sales growth.
“We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year,” Target chairman and CEO Brian Cornell said in a statement.
The numbers sent Target shares soaring about 6.8 percent in premarket trading to $146.21 as of 7:19 a.m.
Target also saw its cost of sales jump 24.1 percent and its selling, general and administrative expenses rise 14 percent amid higher compensation costs, such as its July move to a $15 starting wage. But the strong sales growth and other factors more than offset those bills, according to the company.
Other big-box retailers have benefitted during the COVID-19 pandemic, which has shut consumers in their homes and forced many smaller merchants to close or scale back their operations.
Hardware store giant Lowe’s reported a 34.2 percent jump in its second-quarter comparable sales on Wednesday, a day after Walmart revealed its online sales spiked 97 percent in the three months ending July 31.