Target (TGT) Q2 2020 revenue omitted estimates

Target on Wednesday blew up any forecast on Wall Street for its fiscal second quarter as it drew millions of new customers online, setting a record for sales from the same store that boosted profits by a staggering 80.3% to $ 1.7 billion.

Sales online and to stores that have been open for at least a year climbed by 24.3% in the quarter ended August 1 – a whole lot for the retailer. Sales from the same store increased by 10.9% while the digital sales of the company almost doubled compared to the same time last year.

Shares jumped by almost 5% in premium trading.

Here’s how the company performed in the second quarter, against what analysts predict, based on average estimates compiled by Refinitiv:

  • Custom EPS: $ 3.38, vs. $ 1.62 expected
  • Revenue: $ 23 billion, expected against $ 20.09 billion
  • Growth from the same store sales: 24.3%, vs. 7.6% expected, according to StreetAccount survey

Target CEO Brian Cornell said in an interview with reporters that the retailer’s mix of merchandise and online options resonated with customers looking for safe and easy ways to shop in the midst of the pandemic. The company benefited from its designation as an essential retailer during lockdowns in the US that forced competitors to close.

“Throughout the year and the last few years, we have built tremendous trust with the guest,” he said, on the call. He said that relationship with customers “has been one of the big drivers behind our success.”

In the second quarter, Target’s store traffic picked up, customers filled their baskets with more items and even sales of beauty and clothing were strong. Sales were also up in all five of Target’s market share categories. The retailer reported its strongest sales in electronics, which rose by more than 70% a year in the same quarter when customers bought office supplies and video games at home. Home and beauty grew by more than 30% and 20% respectively. Two categories – food and drink and essential – were both up 20%.

Apparel, which fell by about 20% in the fiscal first quarter, grew in double digits in the second quarter of the year before.

The company’s online offerings were particularly popular. For example, sales through Target’s curbside pickup service, Drive Up, shot up more than 700% in the second quarter compared to the same time last year. Target sales completed by its online delivery service Shipt grew more than 350% year-over-year.

Cornell said the company attracted 10 million new digital customers in the first half of 2020. He said it also raised $ 5 billion in market share in the first half of the year, while many 44 retailers including JC Penney moved to Sur La Table filings were filed for bankruptcy and others, such as Macy’s and Sephora, fired workers.

The national retailer’s net income increased by more than 80.3% to $ 1.7 billion, or $ 3.35 per share, $ 938 million, or $ 1.82 per share, a year earlier.

After excluding certain items, Target earned $ 3.38 per share, more than double the $ 1.63 expected by analysts researched by Refinitiv.

The company’s total revenue rose 24.7% to $ 23 billion from $ 18.42 billion a year earlier, beating analysts’ expectations of $ 20.09 billion.

Target’s private label grocery brand, Good & Gather, hit $ 1 billion in sales after launching last September. It collaborated with other own brands, such as children’s clothing brand, Cat & Jack, in reaching that brand.

Cornell provided no financial outlook for the rest of the year, saying it is bad to predict store patterns in the coming months. For example, he said, families have delayed shopping back to school because many are still waiting to hear if their children will return to class or go home to school.

However, he said, it is in early August with sales of the same store, including digital sales, being able to keep in the double digits.

He said the retailer also faces uncertainty as it prepares for the holidays and school district plans change depending on the distribution of Covid-19.

Cornell said he just saw numbers, saying of the 56 million students in the U.S., 66% start remotely with schools.

“Sitting here today, I do not know if 30 days from now that number will be 6% as 96%,” he said. “That we need to be flexible, we need to be adaptable.”

Read the full press release here.