Target Outpacing Wal-Mart So Far This Year

Target Corp.'s better-than-expected first-quarter profit offered several points that contrasted with that of larger rival Wal-Mart Stores Inc. That suggests the No. 2 U.S. discounter, known for its cheap chic, is regaining some of the ground lost after a data breach crisis in 2013. A day after Wal-Mart reported a miss in first-quarter profit and a disappointing 1.1% same-store sales gain at Walmart U.S., Target reported a 2.3% increase and offered an upbeat outlook. While Wal-Mart's global online sales have slowed and rose 17% in the first quarter, Target's online sales jumped 38%. Target Chief Financial Officer John Mulligan told reporters on Wednesday that online is now 2.8% of Target's total sales, the first time it disclosed that breakdown. He said Target also expects online sales to grow about 40% in the next few years. Mulligan credited such partnerships as the Lilly Pulitzer collection in helping to raise Target's brand profile. The company also is "testing a lot of things" and adding more organic and other "clean label" products to shore up its food business. "We are really starting to see the benefit to increased focus on the U.S.," Mulligan said. "There's a lot more wood to chop." Target shares rose almost 1% and were the biggest gainer in the S&P Retail Index. The stock is up more than 3% so far this year, in contrast to Wal-Mart, which declined 11%.