Target posted its first sales growth in over a year and raised its outlook

The 5.6% comparable-sales gain marked the end of four consecutive quarters in negative territory, the company said. Store-originated comparable sales contributed a 4.7% gain, while digital comparable sales added 8.9%, with same-day delivery through Target Circle 360 cited as a key driver. Customer traffic grew 4.4% compared with the same period last year.

At $1.71, adjusted earnings per share represented a 32% jump over the prior year's adjusted figure of $1.30. Wall Street had penciled in $1.46 per share and revenue of $24.64 billion, according to CNBC, making both figures a clear beat.

Net sales grew across all six of Target's core merchandising categories. Revenue from sources outside merchandise — including the Roundel advertising business, Target Circle 360 membership fees, and the Target+ marketplace — climbed close to 25%. Same-day delivery, powered by Target Circle 360, grew more than 27%.

"First quarter financial results were stronger than expected, providing encouraging early signs that our clarified strategy is resonating with our guests and driving broad-based growth across our business," CEO Michael Fiddelke said in a statement.

The company's gross margin expanded to 29%, up from 28.2% in the year-earlier period, with the improvement credited to better supply chain productivity, growth in advertising revenue, and reduced markdown rates, partially offset by elevated product costs.

Buoyed by the quarterly results, Target lifted its full-year net sales growth target to around 4%, doubling the 2% growth it had previously projected. For full-year per-share earnings, Target now anticipates landing toward the upper boundary of its $7.50-to-$8.50 guidance range — above the $8.14 consensus estimate, according to CNBC.

"Despite our updated guidance, we're maintaining a cautious outlook given the work we know we have in front of us and ongoing uncertainty in the macroeconomic environment," Fiddelke told reporters.

Spending on capital projects reached $1.0 billion during the quarter, a 31% increase year over year, reflecting the company's stepped-up investment in store openings and renovation activity. Seven new store openings during the quarter pushed Target's footprint to 2,002 locations, with the company reporting that upward of 100 renovation projects remain in progress. The company did not repurchase any stock during the quarter.

For the months ahead, Target pointed to several flagship initiatives: a food and beverage assortment refresh the company called its most sweeping in over ten years, a rollout of the Target Beauty Studio format to more than 600 locations, and a redesign touching nearly three-quarters of its decorative accessories lineup.