Target's profit, comp sales beat on higher customer visits

(Reuters) - Target Corp reported higher-than-expected quarterly profit and a 1.3 percent rise in comparable sales, after a year of declines, as more customers visited its stores and website.

Target's shares rose as much as 5 percent to $57.01 before the bell on Wednesday after the retailer also said it would double the number of its small-format stores.

The company had 34 small-format stores at the end of the second quarter.

The retailer has been trying to turn around its business for several years and in February vowed to aggressively promote its products and keep grocery prices low to better compete with Wal-Mart Stores Inc and Amazon.com Inc.

Target had also said it would focus on opening smaller-format outlets and invest heavily in its e-commerce business.

The company gave an indication that its efforts are paying off, and last month estimated that second-quarter sales would rise, helped by improved customer traffic and sales trends.

Sales at stores open more than 12 months rose 1.3 percent, above the 0.7 percent growth expected by analysts polled by research firm Consensus Metrix.

Net income, however, fell to $672 million in the quarter ended July 29, from $680 million a year earlier.

On a per share basis, Target earned $1.22 compared with $1.16 in the year-ago period, as the company had fewer shares outstanding.

Excluding items, Target earned $1.23 per share, beating the average analyst estimate of $1.19, according to Thomson Reuters I/B/E/S.

Sales rose 1.6 percent to $16.43 billion, ahead of analysts' average estimate of $16.30 billion.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Martina D'Couto)