Target Corp (TGT.N) posted a surprise rise in holiday-quarter sales on Tuesday, buoyed by an increase in store traffic from discount-hungry Americans, even as it joined other retailers to caution on 2023 earnings due to an uncertain U.S. economy.
Shares rose about 5% in premarket trading as it beat quarterly profit estimates for the first time in a year.
Surging prices over the last year have hurt demand for non-essential products, forcing retailers to slash prices on everything from toys to electronics to clear stocks.
The discounts helped drive a 0.7% increase in customer traffic during Target’s fourth quarter, but took a toll on gross profit margins, which fell 3 percentage points.
The big-box retailer forecast full-year earnings of $7.75 to $8.75 per share, below analysts’ estimates of $9.23, according to Refinitiv data.
Other retailers including Walmart (WMT.N), and Home Depot (HD.N) have also issued conservative annual forecasts.
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