Target Corp. (NYSE:TGT) Q3 2018 Earnings Conference Call - Final Transcript
Nov 20, 2018 • 09:00 am ET
Ladies and gentlemen, thank you for standing by. Welcome to the Target Corporation Third Quarter Earnings Release Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will invite you to participate in a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded, Tuesday, November 20, 2018.
I would now like to turn the conference over to Mr. John Hulbert, VP, IR. Please go ahead sir.
Good morning, everyone, and thank you for joining us on our third quarter 2018 earnings conference call. On the line with me today are Brian Cornell, Chairman and CEO; John Mulligan, COO; Mark Tritton, Chief Merchandising Officer; and Cathy Smith, CFO.
In a few moments, Brian, John, Mark, and Cathy will provide their perspective on our third quarter performance, outlook for the fourth quarter, and progress on our long-term strategic initiatives. Following their remarks, we'll open the phone lines for a question-and-answer session.
This morning, we are joined on this conference call by investors and others who are listening to our comments via webcast. Following the call, Cathy and I will be available to answer your follow-up questions.
(Forward-Looking Cautionary Statements)
Also in these remarks, we refer to non-GAAP financial measures, including adjusted earnings per share. Reconciliations of all non-GAAP numbers to the most directly comparable GAAP number are included in this morning's press release, which is posted on our Investor Relations website.
With that, I'll turn it over to Brian for his thoughts on our third quarter performance and our outlook for the rest of the year and beyond. Brian?
Thanks, John, and good morning, everyone. Our third quarter results are the result of superb execution by our team as they continue to drive the outstanding near-term performance. In addition, the team is fully engaged in making meaningful progress as they work to transform Target and position us for sustainable long-term success.
Third quarter adjusted EPS of $1.09 was in line with our expectations and more than 20% higher than last year. This performance also established a new all-time high for Target's third quarter adjusted EPS. Our third quarter comparable sales increase of 5.1% was also in line with our expectations and slightly stronger than the pace we established in the first half of the year. This comp growth is very encouraging on its own, but we're even more excited that it is being driven by traffic in both our stores and digital channels.
Comparable sales in our digital channels grew 49% in the third quarter, far outpacing the industry and the vast majority of our peers. This growth was driven by our guest response to our team's efforts to make the digital shopping experience easy and seamless, deliver new and innovative items through our owned, exclusive and national brand assortment and offer unmatched suite, a convenient fulfillment option.
While digital channel sales continue to grow rapidly, we are benefiting from healthy traffic in sales growth in our stores as well. This growth reflects the capital