Target (NYSE:TGT) raised its profit outlook for the second time this year as a strong second quarter beat expectations. The big-box retailer reported a 2.4 percent increase in same-store sales, led by a three times faster growth in style, baby, kids and wellness compared to the rest of its sales.
"We're very pleased with our second quarter financial results, as traffic growth, strong sales in our signature categories and continued expense discipline drove better-than-expected profitability," said Brian Cornell, chairman and CEO of Target. The results follow a stellar first quarter for the company, which reported a 52 percent increase in profits to $635 million in the first quarter.
The results come just a day after competitor Walmart (NYSE:WMT) reported a not-so-shiny second quarter that included a 15 percent drop in profit due in large part to a raise in workers' hourly wages and an investment in customer service.
Along with the second quarter results, Cornell is celebrating one year at the helm of Target, Star Tribune reported. His massive changes have included the closing of all Target's Canadian stores and the revamping of the executive team. In addition, the company has planned to sell its pharmacies to CVS and cut about one-fifth of the staff at its headquarters.
"While the momentum in our financial results is encouraging, we have much more to accomplish. Looking ahead, we are focused on making further progress against our strategic priorities and are committed to improving operations as we move through the important back-to-school, back-to-college and holiday seasons," Cornell said.
It was also a strong quarter for digital sales, which grew 30 percent and contributed 0.6 percent to comparable sales growth.
However, after-tax losses amounted to $20 million in the quarter, compared with $157 million last year, due the selling off of Target Canada.
-See this Star Tribune article
-See this Target press release
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