Target stores are getting more foot traffic and shoppers are spending more in each trip, raising the company's annual profit outlook and increasing its second-quarter net income three folds, announced the discount-store chain Wednesday.
These improvements can be attributed to CEO Brian Cornell. He has lead the company for only a year, but he has managed to create a significant turnaround for the company with the orders to ramp up the "cheap chic" retailer after facing various challenges.
Cornell said Wednesday that Target is making good progress, bit are still not satisfied. He said they still have much to do to make sure they meet the needs of their customers every time they go to their retail stores. Perhaps one of the major reasons for this boost is the discounter's new strategy to spruce up fashion and merchandises.
Under Cornell's lead, Target narrowed down its set of signature products, including baby products, wellness items, apparels, and even organic goods. During the second quarter, sales of the said products increased three times faster than the average. The company also reshuffled its management under Cornell's administration. This move motivated its dreary Canadian operations, and started focusing on online sales. Target announced March that its restructuring plans will open up thousands of corporate jobs. It has also invested $1 billion in technology and e-commerce.
The company's second-quarter income is $753 million from May 1 to August 1. This is a big leap compared to its $234 million a year ago. Target reports that its revenue rose 2.4 percent in one year, as expected. Target's adjusted earnings were at $1.22 per share, which is above its range of $1.04 to 1.14 per share.
Target's effort to strengthen its e-commerce helped drive more traffic to the store, increasing its sales by 30 percent. The company expects to earn $4.60 to $4.75 per share for the entire year, an increase from its original projection of $4.50 to $4.65 per share. The company's share went up by 57 cents to $80.87.
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