Target (TGT  ) shares were up by nearly 10% following its better than expected Q4 earnings and 2022 guidance. The company sees revenue growth continuing in 2022 at a low to mid-single-digit rate which is a surprise given that many retailers have guided for a year of flat revenue or a slight dip.

Overall, Target has been one of the better stocks and businesses during the pandemic. Target is down about 20% from it's all-time high in November 2021 but still more than 120% up from the market bottom in March 2020. The pandemic was an accelerant for its business due to many other retail stores being closed or outlets for spending unavailable. And, it also made secular gains in terms of the growth and size of its e-commerce business.

Inside the Numbers

In Q4, Target reported earnings per share of $3.19 adjusted, beating expectations of $2.86 per share and a 12% increase from last year. Revenue came in slightly below expectations at $31 billion vs $31.4 billion, a 9% increase from last year.

Comparable sales, which tracks online sales and sales at stores open for longer than a year, increased by 8.9%. Traffic to the website and stores increased by 8.1%, but the average transaction size was basically flat.

The company's forecast for 2022 exceeded expectations despite an expected tough environment for retailers. It sees revenue growth in the forecast revenue growth for the coming year in the low to mid-single digits and EPS growth in the high single digits. Analysts were looking for flat revenue growth and low single-digit growth in EPS.

For 2021, online sales grew by 45% which followed 2020's 235% growth rate. Target's e-commerce segment has been a major success story and vaulted it to #3 in terms of online sales.

The company noted an increase in sales of swimsuits and suitcases, indicating what Americans are planning to do this summer. It said overall spending remained strong despite the various negative factors weighing on the economy.

It also noted an adverse impact from supply chain issues. It also is having to raise wages at stores and distribution centers with higher costs for merchandise and freight. The company also is raising its minimum wage to a range between $15 and $24 for most entry-level positions. It's also increasing the threshold to qualify for health benefits to 25 hours a week from 30 hours per week earlier.