Target Just Gave Walmart a “Three-Piece And a Soda”

If you're anything like me, you’ve probably experienced the classic Target trap. You know, the one where your wife says she only needs one thing, but now you're sitting there in the middle of the store, witnessing a full-blown fashion show while you’re still trying to figure out if you needed paper towels or just another bottle of that magical $5 wine. 

Well apparently, a lot more of us have been doing just that lately. Target, my wife’s go-to for everything from groceries to those impulse buys we didn’t know we needed, just pulled off a surprising Q2 comeback, sending its stock rocketing 15% higher just a few minutes after market open.

What’s the secret? Turns out, slashing prices on the essentials actually works. Target took a knife to the cost of over 5,000 everyday items—like milk, meat, bread—because let’s face it, in this inflation craziness, we’re all just trying to stretch our dollars to the next paycheck. And guess what? It worked. Shoppers started flooding back, and store traffic jumped 3%.

But it’s not just about getting more people through the doors (though that certainly helps). Target’s Q2 revenue rose by 2.7% year over year to $25.5 billion. And as far as earnings go, the retailer posted an adjusted bottom line of $2.57 per share, absolutely demolishing Wall Street’s expectations by nearly 40 cents. To put it in perspective, that’s a 43% increase from the same quarter last year. For a company that’s been feeling the heat from rivals like Walmart, who’ve been copying Target’s every move—this isn’t just a win. It’s Target delivering its own version of Jorge Masvidal’s “three-piece and a soda” right to Walmart’s doorstep.

Speaking of rivals, Target’s got Walmart on its tail, but it’s not backing down. Walmart may have posted an impressive $169.3 billion in revenue last quarter, but Target’s focus on value and its revamped loyalty program (Target Circle 360) are starting to pay off. Brian Cornell, Target’s CEO and apparent master of the retail turnaround, put it best: “We made a commitment to get back to growth, and our team delivered.”

That growth wasn’t some happy accident. Target’s been on a warpath to make shopping so irresistible that you’d need superhuman willpower to walk out empty-handed. Now, before you start thinking this is just a short-lived sugar rush from bargain hunters, consider this: Target’s digital sales also saw a healthy shot in the arm, with more and more customers opting for same-day services like curbside pickup and home delivery. In a world where we’re all too lazy to even put on pants for a work zoom meeting, Target just nailed the convenience game, and that’s a win they’ll happily take to the bank.

Even with all this momentum, Target isn’t getting cocky. The retailer bumped up its full-year profit forecast, now expecting earnings per share to range between $9 and $9.70, up from its previous guidance of $8.60 to $9.60. But let’s be real—for a stock that’s been inching forward all year like a snail on a treadmill, today’s 15% surge is the big win they’ve been waiting for.

Stock.News does not have positions in companies mentioned.