What happened

Target (NYSE:TGT) reported another stellar quarterly earnings report, topping estimates on the top and bottom lines and raising its full-year guidance. The results indicate that the company is continuing to grab market share from struggling department stores and mall-based chains and through initiatives in e-commerce and private brands.

As a result, the stock was flying higher this morning and reached a new all-time high. The stock was up 12.4% as of 11:33 a.m. EST.

Three pictures of Target employees at work.

Image source: Target.

So what

The big-box chain said that comparable sales rose 4.5% in the third quarter, better than almost any other brick-and-mortar retailer, and comps were up nearly 10% on a two-year basis. The retailer executed both in stores and online, as comps rose 2.8% and 1.7%, respectively, in those channels. And customer traffic ticked up 3.1%, showing the company continues to bring in new customers. Digital sales rose 31%, driven by the company's same-day-fulfillment initiatives, and total revenue increased 4.7% to $18.67 billion, beating estimates at $18.49 billion.

What also pleased the market was that margins expanded, showing Target's strategy is driving growth on the bottom line as well. Gross margin increased from 28.7% to 29.8%, and operating income jumped 22.3% to $1 billion. Adjusted earnings per share jumped from $1.09 to $1.36, well ahead of the analyst consensus at $1.19.

CEO Brian Cornell summed up the performance, saying, "Our third quarter results are further proof of the durability of our strategy, as we're seeing industry-leading strength across multiple metrics, from the top line to the bottom line."

Now what

Target also raised its full-year guidance significantly, calling for adjusted EPS of $6.25 to $6.45, up from a prior forecast of $5.90 to $6.20 and last year's result of $5.39, representing nearly 20% growth. For the fourth quarter, Target expects 3% to 4% comparable sales growth and adjusted earnings per share of $1.54 to $1.74, in line with estimates.

Target is executing on multiple fronts and bringing strong momentum into the key holiday season, so it's not surprising to see the stock up double digits today. Shares have nearly doubled this year as the turnaround efforts under Cornell are clearly paying off.