Target (NYSE:TGT) stock is enjoying good momentum heading into its fiscal first-quarter earnings report. The retailer, like many national peers including Walmart and Costco Wholesale, posted record sales during the pandemic. But Target notched faster gains than its rivals, and it paired that market share spike with rising profitability.

Approaching its first operating update of 2021, the big question is whether those good times will last deep into another year. Let's look at three metrics that might support that bullish thesis when Target reports earnings on Wednesday, May 19.

1. Is Target still winning share?

Target is a fundamentally larger company than it was just a year ago. The retailer added $9 billion in new market share in 2020 as consumers turned to its multi-channel selling platform during the pandemic.

A young woman shopping online.

Image source: Getty Images.

Management in early March argued that it was Target's unique merchandising strategy, plus a robust fulfillment network, that allowed it to grow so much faster than its peers. That bullish thesis will be put to the test in Wednesday's report, which might show pressure from shifting consumer spending trends and competitive threats from Costco and others.

Most investors who follow the stock are expecting to see sales rise by 12% this quarter, marking a slowdown from the 21% spike that occurred over the holiday season.

2. Will Target's gross profit margin keep rising?

CEO Brian Cornell and his team have warned investors to brace for slightly lower profitability in 2021. While prices are rising and demand appears strong, Target is planning big investments in the business to help strengthen the supply chain following record volumes last year.

The $15 billion in additional sales would have equated to an extra 300 stores in the base, executives estimate. It is only natural that this higher volume will require new spending and infrastructure to be built out over the next few quarters.

TGT Gross Profit Margin Chart

TGT Gross Profit Margin data by YCharts

A temporary operating margin drop won't be worth worrying about, especially if it's not driven by increased inventory markdowns. Keep an eye on gross profit margin in that case, as continued growth there implies Target is still winning business in premium areas like home furnishings, and in ultra-fast fulfillment services like same-day delivery.

3. Will we get an updated outlook for Target?

Cornell said back in March that there were too many variables displaying uncertainty to allow for an official 2021 sales and earnings outlook. The outlook only broadly suggested market share gains and a slight drop in profitability due to the extra spending on the business.

Wednesday's announcement might change that narrative. With a few months of hard sales data behind it, Target could issue a detailed outlook that investors can compare with chains like Walmart, which is predicting low single-digit percentage sales gains this fiscal year and even faster earnings growth. Shareholders might look past Target's expectations for weaker profits in 2021, especially if the retailer continues to win loyal customers away from rivals in both the in-store and online sales channels.

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.