Target Corp. beat analysts’ expectations with fourth-quarter results that included its best same-store-sales increase in more than two years.
The Minneapolis-based retailer’s results benefited in part from being up against soft comparisons from a year ago, when many shoppers were scared away after it suffered a massive data breach. Still, the numbers exceeded the guidance Target gave analysts last month when it announced it was shuttering its struggling Canadian division and would close its 133 stores up north.
Target said Wednesday that same-store sales rose 3.8 percent, driven mostly from increased store traffic as well as from growing online sales. The company last month told investors to expect a 3 percent increase in same-store sales, up from its previous guidance of 2 percent.
Adjusted earnings per share was $1.50, beating analysts’ expectations of $1.46.
Target CEO Brian Cornell said the retailer saw a particularly strong showing in its focus categories of apparel, baby, kids and wellness in the quarter.
“We’re seeing early momentum in our efforts to transform Target, and our team is entering the new fiscal year with a singular focus on continuing to differentiate our merchandise assortment and shopping experience while controlling costs by reducing complexity and simplifying the way we work,” he said in a statement.
Online sales in the quarter were boosted in part by the retailer’s aggressive year-end-shopping-season promotion of free shipping on any size order.
While that deal ended in late December, earlier this week Target sweetened its year-round free-shipping policy by lowering the minimum order to $25 from $50, making it one of the most competitive offers among big-box retailers.
Target’s exit from Canada was felt in the retailer’s bottom line. It reported a net loss of $2.6 billion in the fourth quarter, compared to a profit of $520 million in the same period a year ago.
On Wednesday, Target shares rose 20 cents to $77.15 in the regular trading session, then lost 14 cents to $77.01 in aftermarket trading.