Target Corporation (NYSE:TGT) shares jumped more than 17% intra-day today after the company reported stronger-than-expected earnings for its third quarter, surpassing Wall Street’s projections. The company also provided an optimistic outlook for the current quarter, which exceeds analysts’ expectations. This performance is attributed to effective inventory and cost management strategies.

In the quarter, Target achieved adjusted earnings per share of $2.10, significantly higher than the anticipated $1.47. This outcome was the result of disciplined inventory and expense management. Notably, the company’s inventory levels were 14% lower than the previous year, and there was a reduction in freight and supply chain expenses.

Despite these positive results, Target experienced a decline in sales of higher-priced items like electronics and patio furniture, as customers affected by inflation curbed their spending. In response, Target has broadened its range of everyday items. This strategy helped limit the fall in quarterly comparable sales to 4.9%, which is less than the projected 5.22% decrease. Beauty products, which account for about 30% of total sales, showed particularly strong demand.

Looking ahead to the fourth quarter, which includes the crucial holiday shopping period, Target forecasts an adjusted profit per share ranging from $1.90 to $2.60. The company also anticipates comparable sales to experience a mid-single-digit decline. These projections are more favorable than analysts’ estimates, which predicted earnings per share of $2.23 and a 4.75% decrease in comparable sales.

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