By ANNE D'INNOCENZIO
The Associated Press
NEW YORK - Target topped expectations in just about any way measureable during the second quarter as it pushed faster delivery for customers and invested heavily in new private label brands.
Comparable store sales, which include online sales, rose 3.4 % as customer traffic jumped 2.4%. The measure includes sales at stores open at least a year and online sales. Sales at established stores rose 1.5%. Online sales soared 34%.
The Minneapolis company raised profit expectations for the year, sending shares up nearly 12% before the opening bell Wednesday.
Target is underscoring the successes of big box giants in checking the advance of Amazon.com. Walmart raised its outlook for the year last week after a very strong quarter.
Both have expanded their online presence, populated shelves with new merchandise, and modernized stores.
Being squeezed between big box stores and Amazon are mall-based clothing chains and department stores. J.C. Penney's, Macy's and Kohl's and other retailers are all getting hammered. Still, it is a precarious time for even surging retailers like Target.
The Trump administration imposed a 25% tariff on $250 billion in Chinese imports. A pending 10% tariff on another $300 billion in goods would hit everything from toys to clothing and shoes that China ships to the United States.
The prospect of raising prices, or absorbing higher costs, would be perilous for U.S. companies if the economy dips into recession, as some recent indicators have suggested it may.
Home Depot on Tuesday cut its sales expectations for the year in part because of the potential impact of tariffs on customers.
Macy's said last week that its shoppers don't have an appetite for higher prices in a ballooning U.S. trade war with China. The department store was forced to raise prices on some luggage, housewares and furniture to offset the costs of a 25% tariff implemented in May. Macy's vowed not to increase prices as a result of the 10% tariff, but CEO Jeff Gennette said the company will be speaking with vendors about ways to offset rising costs if the trade war escalates.
Target remains focused on what it can control. It's spending more than $7 billion through 2020 to update its stores, open smaller stores in urban areas, and expand further online.