(Reuters) – Target raised its annual profit forecast on Wednesday, but beat second-quarter expectations as price cuts drew more customers to its U.S. stores.
The group, which mainly sells non-essential items such as electronics and home decor, expects full-year profit of between $9.0 and $9.70 (8.09-8.72 euros) per share, compared with a previous range of $8.60-9.60.
Driven by a recovery in traffic, Target reported a rise in comparable sales, with the US retail giant saying price cuts on thousands of items attracted consumers coping with inflation.
The group has also expanded its range and Brian Cornell, chief executive, said that this “newness” and price reductions led to a 3% increase in visits to the group’s 2,000 stores in the second quarter, compared with a 1.9% drop in the previous quarter.
Comparable sales rose 2% year-on-year, beating analysts’ expectations of a 1.15% increase, according to LSEG data.
“We see an incredibly resilient consumer in the face of high inflation and other challenges they face in managing their household budgets,” Cornell added at a news conference.
Target maintained its full-year comparable sales growth forecast of 0% to 2%, but warned that growth would be at the lower end of the range.
Analysts had expected a 0.36% increase, according to LSEG data.
On Wall Street, the stock jumped 14.55% in pre-market trading.
(Reporting by Ananya Mariam Rajesh and Savyata Mishra in Bangalore and Siddharth Cavale in New York; by Elena Smirnova; editing by Augustin Turpin)
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