Q2 solid sales confirm that Target is well-positioned to ride the new retail trend of merging online and offline sales.

Target Corporation's (TGT) strong performance in the second quarter reinforced the company's leadership in the retail space, according to its chairman and CEO, Brian Cornell.

"In the second quarter, our business generated continued growth on top of record increases a year ago, reinforcing Target's leadership position in retail," he said. "We've spent years building and investing in the durable model we have today, which is supported by a differentiated strategy and the best team in retail."

Target reported Q2 EPS of $3.65, up 8.9 percent from $3.35 in 2020, and ahead of analyst expectations, and offered an optimistic outlook for the rest of the fiscal year. Total revenue came at $25.2 billion, up 9.5 percent from 2020. Operating income was $2.5 billion, up 7.2 percent from $2.3 billion last year.

Comparable sales grew 8.9 percent in the second quarter, reflecting the return of shoppers to the company's stores, which are at the core of Target's "durable model." (See Target stock charts on TipRanks)

Target's Durable Model

Target has a simple business model: place the store at the center of the new retailing universe, which is shaped by the merger of online and offline sales. To accomplish this goal, Target invested heavily in remodeling more than half the stores in the chain over the last four years, while enhancing service and subject matter categories.

The company then expanded its product and private label brand offerings to turn Target into a one-stop shop. That's a place where customers can buy anything from groceries to medicine and general merchandise.

"We believe that America still embraces stores, and the traffic we're seeing tells us that stores continue to play a very important role," said CEO Brian Cornell in a conference call.

Meanwhile, Target has also invested in fulfillment and delivery. For instance, the company has launched Same Day Shipping with Shipt, its free two-day delivery offering. Also, it has improved curbside and in-store pickup, giving customers the choice to order online and have products picked up at the local stores. That's a big deal for customers who cannot wait for delivery, and something purely online retailers like Amazon (AMZN) are missing thus far.

More Opportunities Ahead

Target's significant investments in expanding its offline and online presence will help the company explore new opportunities in the hybrid retail space. TipRanks assigns a "Perfect 10" Smart Score for the company, citing solid technical and fundamentals.