Target Corporation (NYSE:TGT) released its second quarter earnings report before opening bell this morning, posting earnings of 78 cents a share, excluding items. Total revenue increased 1.7% to $17.41 billion. Analysts had been expecting earnings of 79 cents a share on $17.38 billion in revenue.

Target Corporation

GAAP earnings per share were 37 cents for the second quarter. Sales at stores open for a year or more were flat.

Target sees digital sales growth

The big box retailer continued to reel from last year’s data breach, as its second quarter profit plummeted by 62%. However, Target reported a 30% growth rate in digital sales including flexible fulfillment. That’s about double the industry growth rate. Transactions in the company’s U.S operations fell 1.3%, while Canadian transactions rose 63.1% to $449 million.

GAAP earnings per share were 37 cents for the second quarter. That result includes $111 million or 11 cents per share in net pretax expenses from the data breach. Target also reported $285 million or 27 cents a share in early debt retirement losses and $16 million or 1 cent per share in pretax impairment losses on undeveloped land in the U.S. There was also a 1 cent per share negative impact in connection with the company’s beneficial interest asset.

Target looks to gain from back to school shopping

Despite the weak U.S. results, management remains positive on the current quarter.

“In the U.S., traffic trends continue to recover and monthly sales are improving, with July comparable sales up more than 1%,” said John Mulligan, executive vice president and chief financial officer of Target Corporation, in a statement. “Better U.S. sales have continued into August, driven by early back-to-school results. In Canada, the team is making important changes to operations and the merchandise assortment with a focus on delivering improved results by this holiday season.”

During the second quarter, Target also paid out $272 million in dividends, an 18% year over year increase. In June, the company raised its quarterly dividend 21% to 52 cents a share, starting with the Sept. 10 dividend.

Target provides guidance

Along with this morning’s results, Target also trimmed its full year guidance. For the current quarter, Target projects adjusted earnings of between 40 cents and 50 cents for its U.S. and Canadian operations. That number excludes future expenses related to the data breach. For the full year, the big box retailer projects adjusted earnings of between $3.10 and $3.30 per share. That’s a reduction from the previous guidance of between $3.60 and $3.90 per share. Target expects GAAP earnings per share for the full year to be 48 cents lower than adjusted earnings per share.