Target said Wednesday that sales grew about 3% in its fiscal second quarter, a return to growth after a prolonged stretch of sluggish sales and squeezed profits.
The discounter beat Wall Street’s earnings and revenue expectations, as shoppers made more visits to Target’s stores and website and bought more discretionary items like clothing.
Even so, the company stuck by its previous full-year sales forecast and struck a cautious note. Target said it expects comparable sales for the full year to range from flat to up 2%, but said it now expects the increase will likely be in the lower half of the range.
Target raised its profit guidance, however, saying it expects adjusted earnings per share to range from $9 to $9.70, up from the previous range of $8.60 and $9.60.
Shares rose more than 10% in premarket trading as Target showed improvement in generating profits.
On a call with reporters, Chief Operating Officer Michael Fiddelke said Target took a “measured approach” with its outlook because it’s hard to predict consumers’ mindsets and the state of the economy in the coming months.
“While we’ve been pleased with our performance so far this year, and our view of the consumer remains largely the same, the range of possibilities and the macroeconomic backdrop in consumer data and in our business remains unusually high,” he said.