Department store chain (NYSE: TGT) topped its second-quarter earnings estimates, sending shares higher as a result. But it's a dubious victory. Same-store sales slipped 5.4% year over year, and the company cut its already-weak revenue and earnings guidance for the entirety of fiscal 2023. The company is clearly running into more of a headwind than some of its rivals.

There is one mostly overlooked bright spot buried within Target's Q2 reporting, however, which leaves the retailer better positioned for the future than most investors may recognize. That's its inventory levels. It doesn't have too much of it -- finally -- leaving the door open to procuring more of the more marketable goods if and when it needs them in the foreseeable future.

If you've not yet heard, Target's Q2 top line rolled in at $24.8 billion. That's 4.9% less than it reported for the same quarter a year ago, falling short of estimates of nearly $25.2 billion as well as marking the first quarterly sales drop in six years. Per-share earnings of $1.80 are firmly higher than the Q2 2022 comparison of $0.39, as well as better than analysts' average expectation of $1.39 per share.

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Source Fool.com