: Target’s stock soars after big profit beat, although sales falls shy

Shares of Target Corp. TGT shot up 9.7% toward a two-month high in premarket trading Wednesday, after the discount retailer reported fiscal third-quarter profit that was well above expectations, while net sales fell short. Net income for the quarter to Oct. 28 rose to $971 million, or $2.10 a share, from $712 million, or $1.54 a share, in the year-agol period. Excluding nonrecurring items, adjusted earnings per share of $2.10 beat the FactSet consensus of $1.47. Sales fell 4.3% to $25.004 billion, below the FactSet consensus of $25.285 billion, but same-store sales declined 4.9% to beat expectations of a 5.3% fall. The company said weakness in discretionary categories offset continued strength in “frequency” categories, most notably in beauty. For the fourth quarter, the company expects adjusted EPS in a wide range of $1.90 to $2.60, which surrounds the current FactSet consensus of $2.23. Target’s stock has dropped 11.4% over the past three months through Tuesday, while rival shares of Walmart Inc. WMT have gained 5.3% and the S&P 500 SPX has tacked on 1.3%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.