What happened

Shares of retail giant Target (NYSE:TGT) gained 23.9% in August 2019, according to data from S&P Global Market Intelligence. The surge hinged on a solid second-quarter report, which sent Target's stock 19% higher in a single day.

So what

Target's second-quarter sales rose 3.6% year over year, stopping at $18.4 billion. On the bottom line, adjusted earnings jumped 24% higher to $1.82 per diluted share. Your average Wall Street analyst would have settled for earnings near $1.62 per share on revenue in the neighborhood of $18.3 billion.

These figures added up to a barely there revenue beat and a larger earnings surprise.

A woman smiles at her smartphone, holding a credit card in her other hand.

Image source: Getty Images.

Now what

This company is doing more than just tightening up the nuts and bolts of a time-honored retail model. Target is leaning into next-generation retail principles, automating its warehouses with robotics, and supporting its online sales in many new ways. Pairing these progressive ideas with Target's household-name-brand quality is already leading to impressive results. In that light, the market's positive reaction to Target's second-quarter earnings surprise makes perfect sense from a long-term perspective.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.