As Walmart delivered an encouraging domestic performance, fellow giant Target has brought optimism to US retail with its third-quarter results.

Target’s sales came in ahead of expectations, with revenue up 2.1% to $17.61bn (£11.65bn).

Like-for-likes sales were up 1.9% and still maintaining an impressive near two-year run of quarterly same-store gains. Digital sales, including online and mobile, were up 20%, adding 0.4% to like-for-like growth.

As a result, Target has adjusted fiscal-year earnings upwards, something which will certainly keep investors happy.

Target turnaround

The showing will intensify the aura around chief executive Brian Cornell, under whose stewardship Target’s turnaround seems in sound shape.

Focusing on key categories such as fashion, baby, kids and wellness has clearly resonated well with its core shopper. And that shopper seems happy to keep spending at Target. With a solid basis now established, the next step will be building on this firm foundation.

The coming holiday season will likely be important for Target in the short term. It has certainly made considerable efforts to heighten its allure to the seasonal shopper – shipping fees axed, extended Black Friday deals, price-matching online competitors and so on.

In common with its immediate competitors, Target is making big online play this season, but how evolved its offer remains to be seen. The promotional period will certainly be a good indicator of the progress Target has made on supply chain and fulfilment.

Clearly, there’s a desire to forge ahead with digital – which this time contributed 2.7% to overall sales (compared with Walmart’s estimated 2014 figure of 2.5% globally) – and Target.com does seem to be a credible concern right now.

Yet a move to aim at overseas markets could betray a lack of confidence in seizing significant US online share. We have to wonder how much success Target will find abroad, given it is such a US-centric brand. Even in Canada, one overseas market in which it does have recognition, the Target brand is unlikely to be held in much regard.

Supply chain issues appear to still be a problem, with urgent measures being considered for fresh produce. Meanwhile, Target has turned to the RangeMe online sourcing solution to improve responsivity on buying.

Flexible format

These measures will assume even greater importance going forward given the accelerating roll-out of its new flexible format stores. The company seems minded to lessen its dependence on big box and to become more agile and able to seize opportunities when they arise and in response to shifting consumer behaviour. Recent food service and in-store bars trials show a desire to thoroughly examine all potential conceptual options.

This is being accompanied by a renewed shopper focus, both in terms of in-store environment and enhanced customer convenience, exemplified by fulfilment tie-ups with the likes of Instacart and Curbside. Innovation is becoming an obsession: Target teaming with Shazam, Techstars and online clothing reseller ThredUp, among others, to make new customer connections.

This appetite for change has filtered into the assortment itself, with September seeing time called on the long-standing collaboration with the Cherokee clothing brand and the announcement of several new supplier collaborations. Healthy and green initiatives have also been vigorously pushed forward, with the Simply Balanced range seeing more additions along with initial trials of healthier checkouts.

In fact, the last few months have given an impression of a company keen to assert its new focus and anxious to sustain forward momentum following the data breach debacle and the misjudged Canadian venture.

Layoffs at HQ, a succession of new executive hires and a wholesale restructuring of its IT division (including bringing the arm back in-house) lend an impression of a company with a distinct vision of where it eventually wants to be, but perhaps still not wholly certain of which route will prove the most rewarding.