Target Corp (TGT.N) on Wednesday reported a larger-than-expected increase in first-quarter profit as revenues got a boost from online sales and a program to narrow its product focus.
Target, the fourth-largest U.S. retailer, also said it repurchased $562 million worth of its shares in the quarter, resuming buybacks for the first time in nearly two years.
Adjusted earnings, excluding restructuring costs and other items, came to $1.10 per share in the three months ended May 2, against a profit of 92 cents in the same period a year earlier.
Analysts, on average, expected per-share profit of $1.03, according to Thomson Reuters I/B/E/S.
Target said comparable sales at stores open at least a year rose 2.3 percent, matching the market consensus, according to Consensus Metrix. One-third of the growth came from online-generated sales, which jumped 38 percent.
For the full year, the company expects adjusted earnings of $4.50 to $4.65 per share, against its previous outlook of $4.45 to $4.65. The range is still in line with the average analyst projection of $4.56.
Under Chief Executive Officer Brian Cornell, Target has focused on promoting a narrower set of products, or "signature categories," that include apparel and items for children, babies and health and wellness.
"We're pleased with our first quarter traffic and sales, particularly in our signature categories, which drove better-than-expected profitability through improved gross margin and
continued expense management," Cornell said in a statement.
In March, Cornell unveiled a restructuring plan that eliminated several thousand corporate jobs, revamped its grocery operations and included a $1 billion investment in technology in such areas as its supply chain.
Including costs related to the restructuring, Target said earnings from continuing operations came to $1.01 in the quarter, up from 89 cents a year earlier.
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