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Target raises earnings forecast after profit rises

[CHICAGO] Target Corp on Wednesday reported a bigger-than-expected increase in quarterly profit as revenue got a boost from online sales and strong growth in product categories at the centre of its turnaround plan.

Target, the fourth-largest US retailer, also raised the lower end of its earnings forecast for its fiscal year. It said it expected earnings of US$4.65 to US$4.75 per share, excluding special items, against its previous outlook of US$4.60 to US$4.75.

The Minneapolis-based retailer's shares were up 2.8 per cent at US$74.36 in premarket trading. At Tuesday's close, they had fallen nearly 4 per cent this year.

Excluding special items, earnings came to 86 cents per share in the third quarter ended on Nov 1, compared with 79 cents a year earlier.

Net sales rose 2.1 per cent to US$17.6 billion.

Analysts on average expected profit of 85.9 cents per share on sales of US$17.57 billion, according to Thomson Reuters I/B/E/S.

Target said sales at stores open at least a year rose 1.9 per cent, beating the market consensus of 1.7 per cent, according to research firm Consensus Metrix.

Digital sales, including online and mobile, increased 20 per cent, contributing 0.4 percentage points to comparable sales growth.

Under Chief Executive Officer Brian Cornell, Target has focused on promoting a narrower set of products, or "signature categories," that include apparel and items for children, babies and health and wellness.