Target said its traffic growth of 6.4% was by far the strongest since the company began reporting that metric in 2008. E-commerce also played a big role in Target’s overall comparable sales increase for the quarter. Comparable digital sales grew 41% in the three month period ended August 4, on top of 32% growth in the prior year period. Comparable store sales grew 4.9%.
“We are extremely pleased with Target’s second quarter results, which demonstrate our guests’ excitement for the enhanced and differentiated shopping experience we’re building,” Target chairman and chief executive officer Brian Cornell said in a statement. “For the second consecutive quarter, traffic growth is better than we’ve seen in well over 10 years, driving 6.5% comp growth — Target’s best in 13 years.
“We laid out a clear strategy at the beginning of 2017, and throughout this year we’ve been accelerating the pace of execution. We’re on track to deliver a strong back half and we’ve updated our full year guidance to reflect the strength of our business and the consumer economy. As we look ahead to 2019, we expect to achieve scale across the full slate of our initiatives — creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target to continue gaining market share.”
Target made capital investments of $1.03 billion in property and equipment in the second quarter. It also returned $761 million to shareholders in the period. That includes dividends of $330 million — down from $331 million in second quarter 2017, which the company said reflects a decline in share count offset by an increase in the dividend per share. Target also bought back 5.8 million shares of common stock at an average price of $74.31, for a total of $431 million. Target finished the quarter with about $2.3 billion of remaining capacity under its current $5 billion share repurchase program.
For both the third quarter and second half of 2018, Target said it expects comparable sales growth in line with the 4.8% gains the company delivered in the first half. Target has also raised its earnings forecast for the rest of the year, projecting adjusted earnings per share in the range of $5.30 to $5.50, up from the previous forecast of $5.15 to $5.45.