Consumer spending is back and has never been better as far as Target CEO Brian Cornell is concerned.
“There’s no doubt that, like others, we’re currently benefiting from a very strong consumer environment — perhaps the strongest I’ve seen in my career,” Cornell told analysts on a call Wednesday.
The retailer’s shares are surging after reporting second-quarter results that beat on earnings, revenue and comparable store sales. Just when many investors have written off brick-and-mortar retailers, Target is seeing its biggest jump in foot traffic and best growth in sales at stores open for more than a year, the company said Wednesday.
“We’re seeing a great consumer response, unprecedented traffic. As we go back and look, we’ve never seen traffic growth like this, Cornell said on CNBC’s “Squawk Box” on Wednesday.
The big-box retailer also said digital sales skyrocketed more than 40 percent during the quarter. Building on that momentum, it raised its earnings outlook for the full year.
Its shares jumped 6.5 percent in premarket trading on the news.
Target has been focused on reinvesting in its business ever since it laid out a strategy at the start of last year to pour $7 billion into expanding its e-commerce platform, bulking up its lineup of in-house brands, opening new small-format stores and remodeling existing locations. Cornell said those investments appear to be paying off. Target reported its strongest same-store sales growth in 13 years.
A healthy U.S. economy, rebounding consumer confidence and record low unemployment is also benefiting retailers like Target and Walmart. The latter reported earnings last week that also topped analysts’ expectations, driving Walmart shares up more than 9 percent in one day.