Investing.com -- Target (NYSE:TGT) has posted higher-than-anticipated income in the third quarter and delivered a forecast for its current three-month period that was largely above Wall Street expectations, as the big-box retailer moved to clear out inventories and corral costs.
Adjusted earnings per share of $2.10 in the three months ended on Oct. 28, above forecasts of $1.47, which the Minneapolis-based firm said reflected "disciplined inventory and expense management." Inventory at the end of the quarter was 14% lower than last year, while freight and supply chain costs dropped.
However, sales of pricier products like electronics and patio furniture declined as inflation-hit customers continued to rein in spending. Target has moved to expand its offerings of daily-use items to counteract this trend, helping quarterly comparable sales fall by 4.9%, a shallower drop than estimates for a decrease of 5.22%. Demand for beauty products, which make up around 30% of total sales, were particularly solid.
"[O]ur team continued to successfully navigate our business through a very challenging external environment," said Chief Executive Officer Brian Cornell in a statement.
For its fourth quarter, which includes the key holiday shopping season, Target sees adjusted profit per share of between $1.90 to $2.60 and comparable sales "in a wide range around a mid-single digit decline." The firm was projected to forecast per-share earnings of $2.23 and a fall in comparable sales of 4.75%.
The business previously slashed its full-year sales and profit expectations in August, saying it is taking a "cautious approach" to the second half of 2023.
Shares in Target surged in premarket U.S. trading on Wednesday.