Target exceeded Wall Street’s expectations in both revenue and earnings for the holiday quarter, leading to a nearly 12% increase in the Minneapolis-based retailer’s shares.

Despite showcasing improvements in profitability and margins, Target anticipates another year of sluggish sales.

Although Target’s comparable sales registered a third consecutive quarter of decline, the company’s overall performance was notable.

The crucial metric, encompassing digital sales and adjusting for store-related factors, dropped by 4.4% in the fiscal fourth quarter.

Target remains cautious about a rapid sales recovery, CNBC reported.

Projections for the current quarter foresee a comparable sales decline ranging between 3% and 5%, with adjusted earnings per share expected to fall within the $1.70 to $2.10 range.

Looking ahead to full-year 2024, Target anticipates flat to up 2% comparable sales and adjusted earnings per share ranging from $8.60 to $9.60.

Despite these challenges, Target highlighted its progress, especially in the face of reduced discretionary spending.

Noteworthy improvements include increased store and website traffic for the second consecutive quarter, boosted profits through effective inventory management, and benefits derived from decreased supply chain, freight, and e-commerce fulfillment costs.

Additionally, a focus on lower price points has resonated positively with shoppers.

Written by B.C. Begley