Target Corp. raised its full-year profit projection Wednesday after the cheap chic discounter reported strong second-quarter results that showed healthy spending in food, beauty products and other items.
Target, based in Minneapolis, also issued a profit outlook for the current quarter that is well above analysts' expectations.
Target's rosier picture joins a number of other major retailers, including Macy's Inc., TJX Cos., and Home Depot, that have boosted outlooks as they feel more confident in shoppers' spending in the second half of the year.
The earnings reports, which cover the three months that ended in late July, add to a government retail sales report released Tuesday that showed Americans increased their retail spending in July by the most in five months. It offers encouraging news for the economy after retailers grappled with frugal consumer spending this past spring.
Like most retailers, Target's challenge has been luring shoppers into stores during a yo-yo economic recovery.
Target, which sells clothes and trendy decor under the same roof as toothpaste and cereal, has reached out to customers with two growth initiatives. It has been offering a larger selection of foods and also a program it started in 2010, which gives shoppers a five per cent discount when they pay with Targetbranded credit and debit cards.
Target posted earnings Wednesday of $704 million, or $1.06 per share in the period ended July 30. That compares with $704 million or $1.03 per share, in the same period last year.