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A Target store in Arvada, Colo, on Jan. 10, 2014.Rick Wilking/Reuters

U.S. shoppers returning to stores ahead of the back-to-school season helped Target Corp. forecast higher same-store sales growth after beating quarterly estimates on Wednesday, even as online demand sharply dropped from pandemic highs.

Traffic rose about 13 per cent in the second quarter, in sharp contrast from a year ago when customers mainly relied on the company’s speedy delivery services for their shopping needs.

Along with larger rival Walmart Inc.’s results from a day earlier, Target signalled a return to prepandemic behaviour among U.S. shoppers as vaccinations and eased restrictions encourage more people to step out.

“We believe that America still embraces stores and the traffic we are seeing tell us that stores continue to play an important role,” Target chief executive officer Brian Cornell said.

Executives also signalled a “meaningful” change in the use of online services, citing a 55-per-cent rise in same-day offerings such as in-store pickup and Drive Up while sales on orders shipped directly to home fell.

Digital comparable sales rose 10 per cent, against the 195-per-cent jump a year earlier and 50 per cent in the first quarter. Total comparable sales rose by a better-than-expected 8.9 per cent.

The retailer projected high single-digit sales growth for the second half of the year, betting on the strong start to the back-to-school season, at a time when supply chain disruptions, higher labour costs and the fast-spreading Delta variant threaten an economic recovery.

“The main risk for Target (and much of retail right now) is rising input costs and pass through power given the competitive environment … Target’s productivity initiatives and sales leverage should enable them to show an attractive return,” Evercore analyst Greg Melich said.

Target’s Mr. Cornell said the company was not seeing any adjustment in consumer behaviour so far owing to Delta.

Shares of Target, which announced a new US$15-billion share repurchase program, slipped 1 per cent, having gained about 45 per cent this year.

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