Target Corporation (TGT) jumped 5.6% at 9:59 a.m. in New York, after its same-store sales rose by the largest percentage in a decade and the retailer said it can keep the momentum going.
The 116-year-old, Minnesota-based company reported $17.8 billion in revenue for the second quarter, beating estimates by $500 million, and earnings per share of $1.47 against a $1.40 estimate, leading one analyst to call the results "glorious".
The momentum established in the past year is remarkable, as revenue rang in at $16.4 billion just a year ago, but room to grow remains according to CEO Brian Cornell.
"We laid out a clear strategy at the beginning of 2017, and throughout this year we've been accelerating the pace of execution," he said in a release announcing the earnings results. "We're on track to deliver a strong back half and we've updated our full year guidance to reflect the strength of our business and the consumer economy."
In fact, he told CNBC this morning that the company is "going to do the same thing in the second half as the first half," continuing to set a high mark.
The new targets will be lofty ones to shoot for, as comparable sales growth of 6.5% and traffic growth of 6.4% were reported for the company valued at over $45 billion.
Yet the challenges remain for the company as it will continue to compete with giants such as Walmart (WMT) in brick and mortar stores and Action Alerts PLUS holding Amazon (AMZN) for online retail.
Further trade battles with China and tariffs on imports pose a risk to Target as it attempts to maintain competitive prices.
Cornell downplayed the concern in an interview with CNBC this morning, noting the "flexibility and agility" of Target's business model as equipping the retailer to deal with challenges as they arrive.
Tariffs will be front and center for the retail industry Wednesday as Stephen Lamar of the American Apparel & Footwear Association and Karen Giberson of the Accessories Council will be speaking at U.S.-China tariff hearing, discussing the trade war and its impact on clothing retail.
The company's earnings call will be broadcast at 8 a.m. ET this morning and analysts will certainly be eager to hear how the company can replicate its record growth as the macroeconomic landscape changes.
"We laid out a clear strategy at the beginning of 2017, and throughout this year we've been accelerating the pace of execution," Cornell told analysts on the call. "We're on track to deliver a strong back half and we've updated our full year guidance to reflect the strength of our business and the consumer economy."
