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Target shares surge after it reveals biggest sales growth in over a decade

The Bullseye nailed the holiday season.
Target store inside

Target's holiday season strategy paid off in a big way as it revealed it grew its sales by 5.3 percent in the 4th Quarter.

The Minneapolis-based retailer announced its official Q4 and 2018 financial year results on Tuesday morning, saying it saw same-store sales rise by 2.9 percent and digital sales by 31 percent.

Meanwhile, its overall 2018 sales grew by 5 percent, the highest increase the retailer has seen since 2005, which prompted its shares to rise 5 percent in pre-market trading on Tuesday.

This was the result of getting more people through its doors and onto Target.com, with the company saying its overall customer traffic in Q4 grew by 4.5 percent.

Target invested heavily in the holiday season, creating new holiday displays in its gift and toys section as it sought to capitalize on the demise of Toys "R" Us and Babies "R" Us.

It also ensured the majority of its online orders were fulfilled through stores, resulting in more efficient delivery, as well as having success with orders being picked up by customers in-store, or through its "drive-up" service.

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The company has been investing hundreds of millions of dollars into store remodels, and once again took the financial hit of offering free two-day delivery in the run-up to Christmas.

Target's sales stayed flat during Q4 at $23 billion, while its profit dropped slightly to $799 million, though it notes that it's compared to Q4 in 2017/18, which had an extra week compared to 2018/19.

"We have been driving an ambitious agenda to transform our Company, evolve with our guests and drive strong growth," said CEO Brian Cornell. "On every count we’ve been successful, and as we enter 2019, we will continue to lead the industry by adapting, innovating and delivering more for our guests and shareholders."

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