Why Target Is Poised to Outperform

Target's (NYSE: TGT) second-quarter 2020 earnings report, issued Aug. 19, was so vigorous it seemed divorced from the realities of big-box retail. The company saw year-over-year comparable-store sales growth of 24.3%, powered by digital comparable sales growth of 195%. Even excluding e-commerce sales, store-based "comps" rose roughly 11% against the second quarter of 2019 -- an impressive feat given the continuing pandemic headwinds buffeting in-store shopping in the U.S.

Target's comparable sales strength resulted in a 25% jump in revenue against the prior-year quarter and an 80% leap in net income, to $1.7 billion. Several reasons illustrate why Target is well-suited to reap economic gains during the COVID-19 era.

Most obviously, the nationwide retailer is benefiting from the one-stop-shop nature of its operations, as its merchandise categories, like those of competitor Walmart, span groceries, electronics, apparel, furnishings, sports, and children's toys. Both Walmart and Target are capitalizing on consumers' desire to limit potential coronavirus exposure by buying as many necessities from a single store as possible.

Source Fool.com