The retailer's earnings shot higher on strong back-to-school sales. As Fred Katayama reports, Target lifted its forecast for comparable sales and profit.
Strong back-to-school business helped drive quarterly profit up nearly 11 percent at Target. Overall sales fell. That was partly because the retailer had sold its pharmacy business to CVS Health. Sales at existing stores inched lower as grocery sales fell, but that was better than analysts had expected. Cowen analyst Oliver Chen said, "We are encouraged that signature categories - style, baby, kids and wellness - continue to outperform." Chen also noted that digital sales, which had been sluggish in the past, accelerated in the latest quarter. Target raised its quarterly forecast for comparable store sales and lifted its profit forecast for the full year. Deutsche Bank hiked its price target on the stock. Target shares shot sharply higher in early trading. Its stock this year has fallen nearly 2 percent, vastly underperforming those of its rivals, Wal-Mart and Amazon.