Target spikes as earnings, guidance top expectations

Target reported first-quarter results that topped Wall Street estimates.

The company's guidance also beat expectations.

Shares gained 7% early Wednesday

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Target on Wednesday reported first-quarter results that broadly beat Wall Street estimates, sending shares up 7% ahead of the opening bell.

The retailer earned $1.53 a share on revenue of $17.6 billion, easily beating the $1.44 and $17.4 billion that analysts surveyed by Bloomberg were expecting.

Same-store sales also topped expectations, coming in at up 4.8% while analysts were anticipating a 4.3% gain. The retailer said comparable digital sales surged 42% versus a year ago, and contributed 2.1 percentage points to the overall growth.

“Target had an outstanding first quarter, as our team delivered a great experience for our guests and drove strong growth in traffic, comparable sales, operating income and earnings per share,” Chairman and CEO Brian Cornell said in the earnings release.

“Over the last two years we have made important investments to build a durable operating and financial model that drives consumer relevance and sustainable growth. Target's first quarter performance and market-share gains demonstrate that the model is working.”

Looking ahead, Target sees second-quarter adjusted earnings per share of $1.52 to $1.72, ahead of the $1.60 that analysts were hoping for. Its full year EPS forecast of $5.75 to $6.05 also outpaced expectations.

Target was up 8.8% this year through Tuesday.