Add Target Corp. to the growing list of retailers who had a robust holiday season as shoppers were in a spending mood and items like the Nintendo Switch and L.O.L. Surprise dolls helped boost sales.
The Minneapolis-based retailer reported that comparable sales in November and December rose 3.4 percent, much higher than its forecast, which called for sales to be flat to up to 2 percent. If those numbers hold up in the final weeks of the quarter as executives expect, that would be Target's best performance since 2014, when it saw declines following the 2013 data breach.
Brian Yarbrough, an analyst with Edward Jones, said Target's numbers were impressive.
"It seems like most people had a pretty good holiday," he said. "Consumers were feeling good and we didn't have abnormally warm weather. A lot of things are starting to work [for Target], but I'm not sure yet if it's the start of a trend."
Target's shares rose 3 percent Tuesday.
"Overall, this is a positive outcome," Neil Saunders with GlobalData Retail wrote in a report. "It shows Target is doing the right things and that its ideas have merit. However, it also indicates the need for more care in execution, a faster rollout of the initiatives, and a greater sense of ambition. Ultimately, Target is doing well, but it could be doing better."
The retailer, which has been hustling to keep up with Amazon and Walmart, said it saw sales growth across all of its categories as well as higher traffic in stores and online. It also raised its profit forecast for the full fourth quarter.
"We are very pleased with our holiday season performance, which reflects the progress we've made against our strategy throughout the year," Chief Executive Brian Cornell said in a statement.