Target Corporation (TGT) Q2 sales increased by 2.8 per cent, driven by better-than-expected increase in comparable sales. Comparable sales in style (which includes the majority of the retailer’s apparel categories), baby, kids and wellness grew by more than 7 per cent in the quarter, three times faster than the company average.

Comparable sales was four to five per cent in both home and apparel categories, with apparel showing the strongest performance in baby, kids and women’s ready-to-wear. Digital channel sales grew by 30 per cent and contributed 0.6 percentage points to comparable sales growth. About 80 per cent of digital channel sales growth was driven by home and apparel. One of Target’s key strategic initiatives is to become a leader in digital, since it plays such a major role in driving store traffic.

Gross margin rose by 50 basis points to 30.9 per cent of revenue, reflecting heightened promotional markdowns in the second quarter of 2014 and a favorable merchandise mix in 2015. Net income increased by 221 per cent, up 20.6 per cent from the second quarter of 2014.

The company is pleased with the second quarter financial results, as traffic growth, strong sales in the signature categories and continued expense discipline drove better-than-expected profitability.