Target (NYSE:TGT) shares are soaring higher today after the retailer posted a mixed set of second-quarter numbers. Revenue declined 4.9% year-over-year to $24.77 billion, missing expectations by $460 million. EPS at $1.80 though, easily scaled past estimates by $0.37.
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In Q2, comparable sales declined by 5.4%. Despite this softer sales environment, at $1.2 billion, Target witnessed a 273% rise in its operating income over the prior year. A combination of lower markdowns, lower freight and supply chain costs, and retail price increases helped the company boost its operating income margin to an impressive 4.8% from 1.2% a year ago.
While Target is witnessing growth in its frequency businesses, discretionary categories are still a drag. Amid this environment, the company now expects comparable sales for the rest of the year to hover in a wide range around a mid-single digit. EPS for the full year is seen landing between $7 to $8.
Overall, the Street has a $162.16 consensus price target on Target alongside a Moderate Buy consensus rating. This points to a 29.7% potential upside in the stock.
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