TARGET EXPLODES ON EARNINGS. The stock has gained 55% year to date. By Todd Horwitz, Bubba Trading.


Target’s Hot Streak

Target’s second-quarter earnings report Wednesday beat every estimate forecast by Wall Street, sending its shares to a record high. The retailer’s quarterly profit jumped by 17% as its in-store pickup and same-day shipping services successfully drew more customers. It also raised its outlook for the rest of the year.

Sales at the company’s stores that have been open for at least a year grew 3.4% during the quarter, also exceeded expectations. Target said same-day fulfillment services, including order pickup, drive up and Shipt same-day delivery business, contributed nearly 1.5 percentage points of its overall same-store sales growth.

Shares of Target have soared 19.5% to $102.23 a share in midday trading Wednesday and are poised to eclipse their previous closing high of $89.26 in September 2018. The stock has gained 55% year to date. Digital sales jumped 34% from a year earlier. Same-day services—which include in-store pick up, drive up, and delivery—contributed more than three quarters of its digital sales in the second quarter, up from 20% a year ago.

“Because these options leverage our store infrastructure, technology and teams, same-day fulfillment delivers outstanding financial performance,” said Mr. Cornell in a call with analysts. Mr. Cornell added as the company has shifted its fulfillment from distribution centers to its stores, the costs have gone down by about 40% for regular orders or as much as 90% for same-day orders.

“As we’ve been saying for years we believe that in-store shopping will continue to be important and account for the vast majority of retail sales for many years to come,” Target’s Chief Operating Officer John Mulligan said Wednesday on the earnings call. “However, in a world where consumers have more choices than ever, inferior brick-and-mortar experiences will go away.

That’s why we’re investing heavily both in our store assets and in the experience our team provides.”

Todd “Bubba” Horwitz


Financial Markets and Political Commentary


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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.