Home Business Why Target is shocking everyone and putting Amazon on notice – Yahoo Finance

Why Target is shocking everyone and putting Amazon on notice – Yahoo Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Are you kidding us with that second quarter, Target (TGT)?” data-reactid=”15″>Are you kidding us with that second quarter, Target (TGT)?

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Isn’t traditional retail supposed to be dead thanks to digital beast Amazon (AMZN)? Aren’t we nearing a&nbsp;bruising recession that hammers consumer spending&nbsp;and stock prices? Didn’t Macy’s (M) disastrous second quarter&nbsp;signal a new round of retail doom and gloom looms large? Tariffs are supposed to be obliterating retailer sales and profits right now, no?” data-reactid=”16″>Isn’t traditional retail supposed to be dead thanks to digital beast Amazon (AMZN)? Aren’t we nearing a bruising recession that hammers consumer spending and stock prices? Didn’t Macy’s (M) disastrous second quarter signal a new round of retail doom and gloom looms large? Tariffs are supposed to be obliterating retailer sales and profits right now, no?

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="With that entire dreary backdrop out in full force on Wall Street the past two months, it is no small surprise&nbsp;Target’s stock spiked 19% to a record on Wednesday&nbsp;following a blowout quarter. Target delivered and then some, crushing many of those dire narratives on retail.” data-reactid=”17″>With that entire dreary backdrop out in full force on Wall Street the past two months, it is no small surprise Target’s stock spiked 19% to a record on Wednesday following a blowout quarter. Target delivered and then some, crushing many of those dire narratives on retail.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Talk to top retail analysts and it becomes quickly evident why Target continues to defy conventional thinking. In many respects Target (and even rival Walmart) is starting to crack the code on delivering a seamless shopping experience between their physical stores and online — as many on the Street call “omni-channel shopping.”” data-reactid=”18″>Talk to top retail analysts and it becomes quickly evident why Target continues to defy conventional thinking. In many respects Target (and even rival Walmart) is starting to crack the code on delivering a seamless shopping experience between their physical stores and online — as many on the Street call “omni-channel shopping.”

That primarily boils down to Target offering more services to shoppers such as order online, pick up in-store the same-day and buy online, then have it delivered same-day via its Shipt business.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Target has done a real good job building a strong omni-channel business model and engaging the customer,” veteran retail analyst Janet Kloppenburg of JJK Research said on Yahoo Finance’s&nbsp;The First Trade. “They are flexing their muscles in some key categories such as apparel and beauty, which are outpacing the average comparable store sales from the company. They have also done an excellent job in other omni-channel services and fulfillment.”” data-reactid=”20″>“Target has done a real good job building a strong omni-channel business model and engaging the customer,” veteran retail analyst Janet Kloppenburg of JJK Research said on Yahoo Finance’s The First Trade. “They are flexing their muscles in some key categories such as apparel and beauty, which are outpacing the average comparable store sales from the company. They have also done an excellent job in other omni-channel services and fulfillment.”

That’s for sure.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Wow, that Target quarter” data-reactid=”22″>Wow, that Target quarter

FILE – In this July 10, 2019, file photo shoppers visit the downtown Target Store in Minneapolis. Target Corp. reports financial results Wednesday, Aug. 21. (AP Photo/Jim Mone, File)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Target reported second quarter adjusted earnings of $1.82 a share, trouncing forecasts for $1.62 a share. Same-store sales rose 3.4%, ahead of estimates for 3% growth.” data-reactid=”43″>Target reported second quarter adjusted earnings of $1.82 a share, trouncing forecasts for $1.62 a share. Same-store sales rose 3.4%, ahead of estimates for 3% growth.

The retailer cited a surge in same-day fulfillment as driving sales growth. Its order pick up, drive up and Shipt services accounted for nearly 1.5 percentage points of Target’s overall comparable sales growth during the quarter. Online sales jumped 34% during the quarter.

Target also hiked its estimates for the third quarter, seeing adjusted earnings of between $1.04 per share to $1.24 per share, better than current expectations of $1.16.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“We are really pleased with our second quarter performance, which demonstrates the strength of our strategy and the durable financial model we've built over the last several years,” CEO Brian Cornell&nbsp;said in a statement.” data-reactid=”46″>“We are really pleased with our second quarter performance, which demonstrates the strength of our strategy and the durable financial model we’ve built over the last several years,” CEO Brian Cornell said in a statement.

“Traffic and sales continue to grow while our EPS reached an all-time high, driven by the strength of our team’s execution and their focus on delivering for our guests,” he added.

Target deserves the healthy market response Wednesday.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Whether Target’s stock continues to push higher into the all-important holiday shopping season is anyone’s guest.&nbsp;But when it comes to nailing what it can control, Target deserves high marks.” data-reactid=”49″>Whether Target’s stock continues to push higher into the all-important holiday shopping season is anyone’s guest. But when it comes to nailing what it can control, Target deserves high marks.

This writer can attest to Target’s vastly improved stores, significantly expanded food departments with a host of compelling emerging brands and upgraded offerings in the home department. Target is giving people real reasons to shop at its stores on weekends and order online during the week. Not many in retail could say that one.

Amazon — and all of retail – you have been put on notice by Target.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Yahoo Finance’s Heidi Chung contributed to this story.” data-reactid=”52″>Yahoo Finance’s Heidi Chung contributed to this story.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi” data-reactid=”53″>Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" ” data-reactid=”54″>

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read the latest financial and business news from Yahoo Finance” data-reactid=”67″>Read the latest financial and business news from Yahoo Finance

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”74″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

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