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CORRECTED - Target lifts profit forecast after holiday sales jump


By Siddharth Cavale

(Reuters) - raised its quarterly profit and sales forecasts on Tuesday on the back of surging sales and customer visits in November and December, putting the U. S. retailer on track for the best quarter in five years.

Shares of the Minneapolis-based chain rose as much as 4 percent to hit a near one-year high of $69.88 after the company raised its fourth-quarter profit forecast to $1.30-$1.40 a share from an earlier range of $1.05-$1.25.

That was well above analysts' average forecast of $1.22 per share, according to I/B/E/S.

Target is slated to have poured $1 billion of last year's profits into an effort to boost sales, mainly by investing in and delivery options to take on com Inc .

It has hired more staff, remodelled existing stores and focused on building small-format stores to reach more customers in suburbs.

On Tuesday, the company said same-store sales rose 3.4 percent in November and December and that its sales growth was on track to report its fourth straight year of more than 25 percent gains.

"Target's brick-and-mortar customers are growing in their affinity to the Target interface, pricing on hot products in the fourth quarter and the ability to deliver in time," Jim Fosina, of said.

The lack of strong and players who sell both toys and is likely to have helped the company keep its loyalists away from

N> or bankrupt Toys R Us, Fosina said.

Target raised its same-store sales growth forecast for the quarter ending January to 3.4 percent from a prior forecast of flat to up 2 percent earlier.

Research firm Metrics' said that, if that target were met, it would be the company's strongest quarterly gain since the first quarter of 2012.

Target is the latest in a run of relatively upbeat holiday sales numbers from brick-and-mortar retailers who have suffered most from the huge gains made by com and other retailers over the past decade.

Shares of on Monday surged after it reported a 6.9 percent rise in same-store sales for the same months.

Target said same-store sales in November and December gained in all five of its core merchandise categories: home, apparel, & beverage, hardlines and essentials.

Kitchen items from brands like Threshold, and Keurig, and cordless vacuums from Roomba and were popular gifting items.

An exclusive furniture and household goods brand, co-designed by and Joanna Gaines, was also a hit after launching in November, the company said.

Target's fourth-quarter profit forecast includes a 6 cent to 8 cent benefit from the newly-approved reduction in Federal corporate tax rates.

(This version of the story was corrected to remove reference to Target being No. 2 U. S. retailer in paragraph 1)

(Reporting by and Vibhuti Sharma in Bengaluru; Editing by and Arun Koyyur)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 10 2018. 00:52 IST