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Target stock rallies after sales rise more than expected, boosted by traffic and average ticket gains

Economy, Finance

Shares of Target Corp. rallied 1.8% in premarket trading Tuesday, after the discount retail giant reported fiscal fourth-quarter profit and sales that rose above expectations, boosted by growth in traffic and average ticket and as digital sales more than doubled. Net income for the quarter to Jan. 30 rose to $1.38 billion, or $2.73 a share, from $834 million, or $1.63 a share, in the year-ago period. Excluding nonrecurring items, such as , adjusted earnings per share increased to $2.67 from $1.69, and beat the FactSet consensus of $2.54. Total revenue grew 21.1% to $28.34 billion, above the FactSet consensus of $27.41 billion. Same-store sales increased 20.5% to beat the FactSet consensus of 17.1% growth, as traffic rose 6.5% and average ticket increased 13.1%. Digital same-store sales jumped 118% and accounted for two-thirds of overall same-store sales growth. The company said it did not repurchase any shares during the fourth quarter, but had $4.5 billion available in its buyback program at the end of the quarter. Target did not provide financial guidance, citing uncertainties resulting from the COVID-19 pandemic. Target’s stock has tacked on 5.5% over the past three months through Monday, while the SPDR Consumer Discretionary Select Sector ETF has edged up 4.8% and the S&P 500 has gained 6.4%.

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