Target’s second-quarter earnings report Wednesday outpaced every estimate forecast by Wall Street, sending its shares to a record high.
The massive retailer’s quarterly profit jumped by 17% as its in-store pickup and same-day shipping services successfully drew more customers. This increase also raised its outlook for the rest of the year.
Sales at the company’s stores that have been open for at least a year grew 3.4% during this quarter, which also exceeded expectations. Target said same-day fulfillment services, including order pickup, drive up and Ship same-day delivery business, contributed nearly 1.5 percentage points of its overall same-store sales growth.
Target shares surged by 19% to near $102 per share, a record high. Target set its previous intraday high of $90.39 on Sept. 10, 2018.
Target and its rivals are looking for ways to make shopping more convenient. In order to compete with Amazon, they are pouring money into their websites and trying to speed up shipping times. They are also hoping that consumers don’t mind picking up their orders at the store, especially when it’s faster than waiting for delivery.
“These options offer speed, convenience and reliability,” Target CEO Brian Cornell told analysts on a call Wednesday. “And as a result, they’re quickly becoming the fulfillment choices for our guests. And most importantly, because these options leverage our existing in-store infrastructure, technology and teams, same-day fulfillment delivers outstanding financial performance as well.”
“This is as good a quarter as Target possibly could have had,” Moody’s analyst Charles O’Shea told CNBC’s “Squawk Box.”
Target’s report comes right after one of its bigger rivals, Walmart, which last week reported earnings that topped expectations and raised its outlook for the year despite the ongoing threat of additional tariffs taking effect amid the U.S. trade war with China.
Both Walmart and Target are trying to improve their shopping experiences for consumers.
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