On Wednesday, Target Corp beat analysts' estimates for same-store sales as more shoppers visited its stores to buy clothes and stock up on back-to-school essentials, even though they bought less online compared to pandemic highs.
Comparable sales at Target, which announced a new $15 billion share repurchase program, rose 8.9% in the second quarter of 2014, surpassing past expectations of 8.68%, according to IBES data from Refinitiv.
A majority of the growth was driven by its stores, Target reported in contrast to a year earlier when digital channels accounted for the bulk of sales.
We believe that America still embraces stores and the traffic we are seeing tell us that stores continue to play an important role, Chief Executive Brian Cornell said.
The same market comparable sales in the quarter rose 10%, compared with a 195% rise in the same period a year earlier, when customers relied on Target's same-day delivery services, such as Drive up, Shipt and in-store pick ups, for their shopping needs during the pandemic.
Walmart's quarterly report on Tuesday also signaled that more people were returning to stores and it was slowing online sales after a record year.
While top category sales at Target rose across major categories in second quarter, apparel particularly benefited from the recent President Biden administration's advance child tax credit to early start back-to-school season.
That boost is expected to extend to the current quarter, even though the fast expanding Delta variant threatens to dent an economic recovery.
We are not seeing any adjustment to consumer behavior during the new variant, Cornell said.
The company forecast comparable sales for the second half of the year above analysts' expectations of high single-digit growth.
Total revenue rose 9.5% to $25.16 billion, just behind the estimates of $25.08 billion.