Target Corp. (NYSE: TGT) reported first-quarter 2017 results before markets opened Wednesday. The big-box retailer posted adjusted earnings per share (EPS) of $1.21 and $16.02 billion in revenues. In the same period a year ago, the big-box retailer reported EPS of $1.29 on revenue of $16.2 billion. First-quarter results also compare to consensus estimates for EPS of $0.91 and $15.62 billion in revenue.

Same-store sales slipped 1.3% compared with the first quarter of 2016. The company said the decline was partially offset by revenues at new stores and that digital channel sales rose 22% and contributed 0.8 points to same-store sales growth.

In its outlook for the second quarter of 2017, Target said it expects a low single-digit decline in same-store sales and adjusted EPS of $0.95 to $1.15. Analysts had forecast EPS for the quarter at $1.00 on revenues of $15.91 billion.

For the full year, Target said that it continues to expect a low single-digit decline in same-store sales. The company did not update full-year EPS guidance of $3.80 to $4.20, saying that “better-than-expected first quarter performance increases the probability” that EPS will end up above the midpoint of its prior guidance. Consensus estimates called for EPS of $4.00 and revenues of $68.89 billion.

The combination of higher-than-expected earnings and basically unchanged full-year guidance moved investors to open their wallets this morning. Target reset expectations when it reported fourth-quarter results last February, so now everyone is happy.

Brian Cornell, Target’s CEO, said:

Target’s first quarter financial performance was better than our expectations, reflecting strong execution by our team as they delivered for our guests in a very choppy environment. After starting the quarter with very soft trends, we saw improvement later in the quarter, particularly in March. We are in the early stage of a multi-year effort to position Target for profitable, consistent long-term growth, and while we are confident in our plans, we are facing multiple headwinds in the current landscape. As a result, we will continue to plan our business prudently while preparing our team to chase business when we have an opportunity.

Gross margins dipped slightly, from 30.9% in the year-ago quarter to 30.5% as SG&A expenses increased to reflect higher compensation and marketing costs.

Target said it returned $641 million to shareholders in the first quarter, $305 million in share buybacks and $336 million in dividends.

Shares traded up 7.7% in Tuesday’s premarket to $58.73, in a 52-week range of $52.72 to $79.33. The consensus 12-month price target was $59.43 before results were announced. That’s a downward reset of about $15 a share since Target’s earnings report in February.

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