Target Corp's holiday sales rise 3.4%, boosts profit forecast

Retail Reuters

FILE PHOTO - A newly constructed Target store is shown in San Diego, California May 17, 2016. REUTERS/Mike Blake/File Photo (Copyright Reuters 2017)

(Reuters) - Target Corp (TGT) on Tuesday said its comparable store sales for November and December rose 3.4 percent, driven by strong traffic growth and online sales, leading it to raise its fourth quarter profit forecast.

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Shares of the Minneapolis-based retailer rose 4 percent in premarket trading and were on track to open at a near one-year high of $69.89 on Tuesday.

The company said it expects fourth-quarter adjusted earnings of $1.30 to $1.40 per share, compared with a previous forecast of $1.05 to $1.25.

Target said the forecast includes a 6 cent to 8 cent benefit from a lower corporate tax rate in January from the recently-enacted federal tax reform legislation.

Analysts on average expect the company to post a profit of $1.22 per share, according to Thomson Reuters I/B/E/S.

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The retailer also raised its same-store sales growth forecast for the fourth quarter ending January to 3.4 percent from flat to up two percent earlier.

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The company said same-store sales in the two months saw strong gains in all five of its core merchandise categories: home, apparel, food & beverage, hardlines and essentials.

(Reporting by Siddharth Cavale and Vibhuti Sharma in Bengaluru; Editing by Bernard Orr)

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