Target earnings beat estimates

A customer pushes a shopping cart laden with merchandise at a Target Corp. store opening ahead of Black Friday in Chicago, Illinois.
Patrick T. Fallon | Bloomberg | Getty Images
A customer pushes a shopping cart laden with merchandise at a Target Corp. store opening ahead of Black Friday in Chicago, Illinois.

Target on Wednesday reported a stronger-than-expected jump in same-store sales and profits for the key fourth quarter, helped by its expanding online business, and it forecast modest earnings growth for this quarter.

The retail giant posted earnings of $1.50 a share, excluding one-time items, on revenue of $21.75 billion. Wall Street expected Target to post earnings of $1.46 per share on $21.63 billion in revenue, according to a consensus estimate from Thomson Reuters.

Additionally, the company said it expects to post earnings of 95 cents to $1.05 a share in the current quarter, versus Wall Street estimates for $1.04 a share.

Target said comparable sales at stores open longer than a year rose 3.8 percent in the November-January quarter. That beat its forecast, unveiled last month when it announced plans to pull out of the Canadian market, for a 3 percent rise.

Share prices were up slightly in premarket trading. (Click here to track Target stock.)

"We're pleased with our fourth quarter financial results, which were driven by better-than-expected sales and particularly strong performance in our signature categories-style, baby, kids and wellness," CEO Brian Cornell said in a press release. "We're seeing early momentum in our efforts to transform Target, and our team is entering the new fiscal year with a singular focus on continuing to differentiate our merchandise assortment and shopping experience while controlling costs by reducing complexity and simplifying the way we work."

"We're confident that these efforts will allow us to grow our earnings while returning cash to our shareholders in 2015 and beyond, driving improvements in Target's return on invested capital and creating long-term value for our shareholders."

The retailer last month announced that it would close its 133 stores in Canada. At the time, it projected $5.4 billion in pretax losses from discontinued operations in the fourth quarter, "driven primarily" by the write-down on its investment in Canada.

Target, which suffered a data breach in December 2013 that affected millions of customers, named former Tesco executive Mike McNamara joined Target as chief information officer earlier this month.

"Mike has been a driving force for technology innovation throughout his career. He's got a stellar track record, and I'm excited to see how he'll help our team continue to push new innovations that enhance the shopping experience for Target guests, both online and in stores," Cornell said.

The move comes as the retailer looks to build a stronger online presence and beef up its data security. Target said last month that it expects to report comparable sales of about 3 percent in the fourth quarter, driven partially by stronger-than-expected digital sales.

Read MoreWhat Target is doing to get your online business

Target shares have jumped 37 percent in the last year.

—Reuters contributed to this report.