Target surges 14% after raising earnings forecast
Investment in same-day-delivery new stores pays off
US retailer 0'>Target saw its share price surge by 14.06 per cent after raising its full-year earnings forecast.
Target shares stood at £126.43 at the close of Wednesday trading, a gain of almost 90 per cent this year.
It now expects full-year adjusted profit of between $6.25 and $6.45 per share, up from between $5.90 and $6.20.
The corporation has aimed to improve its delivery times and to revamp its stores. It has spent billions of dollars on opening small stores in college towns and urban areas and on developing its private label business.
Target now fulfils online orders from the back of its stores rather than using a distribution centres, according to CEO Brian Cornell. “About 40 per cent of the cost goes away,'' he said. If a customer orders online and collects in store, or uses curbside pickup or select shipping, “about 90 per cent of the cost goes away”.
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Same-day delivery services accounted for 80 per cent of its digital comparable growth, which itself grew by 31 per cent in Q3.
With the holiday season accounting for up to 40 per cent of retailers’ annual sales, Target looks set to go from strength to strength.
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