MINNEAPOLIS, Minnesota: Target raised its annual sales forecast for the second time this year on Wednesday after price cuts and merchandise changes helped lift quarterly sales, while tariff refunds provided a nearly $1 billion boost to profit.

The retailer reported its third consecutive strong quarter, with comparable sales rising 3.8%, ahead of estimates for 2.5% growth.

Sales were supported by a 3.6% increase in traffic and an 8.7% jump in digital comparable sales as shoppers opted for same-day delivery. Average ticket size was roughly flat.

CEO Michael Fiddelke said the turnaround "will take some time," noting that categories including apparel and home posted only modest growth.

But "where we're making the beginnings of change, we're seeing the green shoots of a good guest response," he said on a call with analysts.

Target shares reversed premarket losses to rise 5% as executives pointed to a strong start to the back-to-school shopping season. The stock has gained 56% this year.

"Let's see if that consumer remains resilient going forward and loyal to the brand. Right now, Michael Fiddelby is hitting it on all cylinders," said Jay Woods, chief market strategist at Freedom Capital Markets.

Fiddelke has focused on keeping shelves stocked and expanding products in categories including baby care and health and wellness. Target has cut prices on more than 10,000 items over the past year and said about 95% of its school supplies were priced below last year's levels, while in-stock levels improved.

In March, Target said it would invest an additional $2 billion, on top of $4 billion previously announced, to address merchandising problems.

The retailer reported double-digit growth in its hardline business, known as Fun101, with Legos among its leading products. It has also expanded space for fresh produce and snacks as it seeks to attract grocery shoppers focused on essentials.

Target's second-quarter gross margin rate increased about 100 basis points to 33.7%.

Fiddelke also pointed to further investments, including plans to launch beauty studios in more than 600 stores and increase the use of technology in areas such as inventory management.

Excluding items and a tariff benefit of $1.65 per share, Target posted quarterly profit of $2.46 per share, beating analysts' estimates of $2.33, according to LSEG data.

Executives said the tariff refund represented a large share of what Target had applied for and that the company expects additional refunds.

On an adjusted basis, Target raised the midpoint of its annual earnings-per-share forecast by 75 cents. In May, it had forecast earnings near the high end of a $7.50-to-$8.50 range.

Target now expects year-over-year net sales growth of around 5%, compared with its previous forecast of around 4%.