Target posted blowout earnings in the three months through August, beating every single Wall Street estimate. Now, experts expect that profit surge to continue through the rest of the year as the retailer vies with Walmart for offline supremacy.
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Part of the reason behind the better-than-expected earnings — quarterly profit jumped by 17 percent — is increased foot traffic after the firm renovated and opened new mini-stores, according to data from Placer.ai, an analytics company.
The decision to build mini-stores (with plans to construct more) has given Target an edge over Walmart when it comes to attracting customers earning more than $100,000 per year because the retailer is placing the stores in higher-earning neighborhoods.
“This new format provides tremendous flexibility in terms of locations, including allowing stores to be placed in environments where rents are high, but average household incomes are also high,” Placer.ai said in the study.
According to the data, more than 17.9 percent of Target customers bring in more than $100,000 per year.
The Minnesota-based company is likely to see even bigger profits in the next quarter, boosted by back-to-school shopping. Target is slated to release third-quarter earnings on Nov. 20.