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New York - Target Corp. raised its full-year profit projection Wednesday after the cheap chic discounter reported better-than-expected second-quarter revenue that showed healthy spending in food, beauty products and other items.
Target, based in Minneapolis, also issued a profit outlook for the current quarter that is well above analysts' expectations. The company's stock hit its highest point since 2007.
Target's rosier picture joins a number of other major retailers, including Macy's Inc., TJX Cos., and Home Depot, that have boosted outlooks as they feel more confident in shoppers' spending in the second half of the year. They're also becoming better at luring shoppers with special deals and other attractions.
The earnings reports, which cover the three months that ended in late July, add to a government retail sales report released Tuesday that showed Americans increased their retail spending in July by the most in five months. It offers encouraging news for the economy after retailers grappled with frugal consumer spending last spring.
Americans appear to be taking signals from the economy's modest but steady improvements. Employers added 163,000 jobs in July, the best month for job growth since February. Home prices are up. Consumers are expressing more confidence. And stock indexes are near their highs for the year. Still, unemployment is hovering at an uncomfortable 8.3 percent, and the housing market is still shaky. Analysts say that the start of back-to-school season, which kicked off last month, gives shoppers reason to spend.
With job growth sputtering in the spring, "there was a lot of gloominess heading into the second quarter," said analyst Brian Sozzi of NBG Productions.
"Consumers continue to show when they're forced to spend, they might spend a little more."