Shares for Target Corp. jumped 8 percent to $77.21 on Wednesday morning, due to reports that the company has had a better-than-expected quarter due to back-to-school shopping and newfound optimism for the impending holiday season.
In addition to Target reporting a smaller decline in comparable sales than analysts had anticipated, Target is reversing an earlier prediction that it would have a weak holiday sales season. Instead of Target suffering a 2 percent fall in sales during last quarter, which many investors were told to expect, comparable sales only fell by 0.2 percent, which the company is now interpreting as a promising indicator of what to expect for its holiday sales. It is now predicting fourth-quarter comparable says to range from negative 1 percent to plus 1 percent, as well as full-year adjusted earnings per share to reach $5.10 to $5.30.
“We are very pleased with our third quarter financial results, which reflect meaningful improvement in our traffic and sales trends and much stronger-than-expected profitability,” explained Target CEO Brian Cornell in a public statement.
Perhaps spurred by the recent turn in the company's fortunes, Cornell also said on Wednesday that he plans on opening "hundreds" of small-format stores, which will both increase the company's presence among major retailers and alter its image as a big-box chain.
"We think we have the opportunity to enter many, many new neighborhoods," Cornell explained during a conference call.