Increased foot traffic in stores and a growing online presence boosted Target’s sales for the first time in a year.
 
The Minneapolis-based retailer said year-over-year sales for the quarter ending July 29 rose 1.6 percent to $16.43 billion. Sales for stores open at least a year rose 1.3 percent. Target said net earnings were $1.22 per share, edging just above analysts’ expectations of $1.19 and well past its own guidance of 95 cents to $1.15.
 
Despite improved sales, the company’s reported a 1.2 percent drop in profit—$672 billion, compared to $680 billion during the same period last year—as it lowered prices, boosted promotions and realized higher costs related to its digital sales.
 
Digital sales surged 32 percent during the quarter, though it still remains a relatively small part of Target. The company revealed in its quarterly report that 4.3 percent of its sales came from e-commerce. That’s up from 3.3 percent during the same period last year.
 
CEO Brian Cornell said he was pleased with the results but that more work needed to be done to get Target back on track.
 
“We continue to focus on our long-term strategy, as we work to transform every part of our business and build an even better Target that will thrive in this new era in retail,” Cornell said in a statement. “While our recent results are encouraging, we will continue to plan prudently as we invest in building our brands, our digital channels, the value we provide our guests and elevating service levels in our stores.”
 
Change is afoot at the retailer, with a flurry of new services, product lines and an acquisition. The company announced earlier this year it was parting ways with several of its well-known brands like Merona and Mossimo. A dozen new lines of clothing and housewares are in the process of being rolled out. It said its Cat & Jack line of children’s clothing, launched about a year ago, is now a $2 billion brand.
 
Earlier this week, the company made two announcements that were meant to improve its online and delivery offerings. First, it said on Monday that it was acquiring San Francisco-based Grand Junction, a logistics technology company that it was already using for a same-day delivery pilot in New York.
 
Then on Tuesday, Target announced the expansion of its competitor to Amazon Prime Pantry, Target Restock, beyond its pilot in the Twin Cities to Denver and Dallas-Fort Worth, remove the requirement that users have a RedCard and added 5,000 additional items that are available to be shipped. Restock allows customers to order up to 45 pounds of household goods and have them delivered to their doorstep by the next day. Target said seven additional metros will have access to Restock soon.
 
Improving Target’s stores was another focus during the quarterly results announcement. The company said it will have remodeled 100 stores by the end of the year with another 300 slated for a refresh in 2018. Target is also expanding its small-format store model with 15 locations slated to come online next year.
 
Target’s $7 billion makeover of its stores and house brands is the subject of TCB’s September cover story.
 
The company’s relative success comes at a time when many department stores are struggling. Analysts have been closely watching as many of the nation’s largest retailers roll out their quarterly results throughout August.
 
Target’s shares ended the trading day up about 3.6 percent.