© Reuters. FILE PHOTO: A shopping cart is seen in a Target store in the Brooklyn borough of New York, U.S., November 14, 2017. REUTERS/Brendan McDermid
(Reuters) -Target Corp beat analysts’ estimates for same-store sales on Wednesday as more shoppers visited its stores to buy clothes and stock up on back-to-school essentials, even though they bought less online compared to pandemic highs.
Digital comparable sales in the second quarter rose just 10%, against a 195% rise in the same period a year earlier, when customers relied on Target (NYSE:)’s same-day delivery services, such as Drive up, Shipt and in-store pickups, for their shopping needs during the pandemic. Online sales rose 50% in the first quarter.
Total comparable sales rose 8.9% in the three months ended July 31, edging past expectations of 8.68%, according to IBES data from Refinitiv.
Shares of Target, which also announced a new $15 billion share repurchase program, fell 1.3% in pre-market trading, having gained about 45% this year.
Target’s results underline a rebound in store buying and a return to pre-pandemic behavior in the United States as vaccinations and eased restrictions encourage more people to step out.
“We believe that America still embraces stores and the traffic we are seeing tell us that stores continue to play an important role,” Chief Executive Officer Brian Cornell said.
Walmart (NYSE:)’s quarterly report, on Tuesday, also signaled that more people are returning to stores, as well as slowing online sales after a record year.
While second-quarter sales rose across major categories at Target, apparel particularly benefited from an early start to the back-to-school season from President Biden administration’s advance child tax credit.
That boost is expected to extend into the current quarter, even as supply chains disruptions, higher labor costs and the fast-spreading Delta variant threaten to dent an economic recovery.
The second half of the year will likely continue to be volatile particularly with the uncertainty caused by the Delta variant, Cornell added.
Total revenue rose 9.5% to $25.16 billion, while excluding items, the company earned $3.64 per share, beating expectations of $3.49.
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