MINNEAPOLIS — Net earnings soared 36% for Target Corp. in the third quarter ended Oct. 28 despite a drop in revenue.

“On the bottom line, our third-quarter EPS of $2.10 was well above our expectations and more than 36% ahead of last year,” said Brian C. Cornell, chief executive officer, in a Nov. 15 earnings call. “This increase reflected the continued benefit of lower freight costs, disciplined inventory management by our team, favorable category and channel mix, and the continued benefit of our work to enhance efficiency, which offset multiple pressures throughout our business.”

Net earnings of $971 million, or $2.10 per share on the common stock, compared with $712 million, or $1.55 per share, in the previous year’s third quarter. Revenues of $25.40 billion were down 4.2% from $26.52 billion, reflecting a sales decline of 4.3% and a 0.6% decline in other revenue. Gross margin rate in the quarter was 27.4%, up from 24.7% in the previous year’s third quarter.

Target’s stock on the New York Stock Exchange closed at $130.46 per share on Nov. 15, up 18% from a Nov. 14 close of $110.79 per share.

Comparable sales declined 4.9% in the quarter.

“Consistent with prior quarters and overall industry trends, discretionary categories were the driver of this decline, partially offset by net sales growth in our frequency categories,” Mr. Cornell said.

He said consumers are facing pressures like higher interest rates, the resumption of student loan payments, increased credit card debt and reduced savings rates, which leaves them with less discretionary incomes and forces them to make trade-offs in family budgets.

“Consistent with these pressures, as we look at recent trends across the retail industry, dollar sales are being driven by higher prices with consumers buying fewer units per trip,” Mr. Cornell said. “In fact, overall unit demand across the industry has been down 2% to 4% in recent quarters, and the industry has experienced seven consecutive quarters of declines in discretionary dollars and units. And while we're happy to see inflation rates moderating this year, if you compare industry pricing in key categories back to 2020, food-at-home pricing for families has increased 25% overall and, in some areas, up to 30%.”

In the food and beverage category, comparable sales were down slightly from last year’s third quarter, but seasonal candy and snacks performed well, said A. Christina Harrington, chief growth officer.

The company will offer value to customers before Thanksgiving through Good & Gather brand turkeys at 99¢ per lb. and side items for $5.

Over the first nine months of the fiscal year, Minneapolis-based Target had net earnings of $2.76 billion, or $5.97 per share on the common stock, which was up 45% from $1.90 billion, or $4.11 per share, in the same time of the previous year. Nine-month revenues dipped 2.9% to $75.49 billion from $77.73 billion.

Target expected to grow its full-year operating income by $1 billion or more in 2023, Mr. Cornell said.