Target CEO Brian Cornell said Thursday the retailer has benefited from a surge in online shopping, but warned it will have lower profits this quarter due to higher costs.

The news sent Target shares tumbling nearly 7% in premarket trading Thursday, but the stock recouped some losses, and shares were down about 3% in trading later in the morning.

Cornell said the trend of shoppers avoiding trips to stores has worked in the discount retailer's favor, and it expects to emerge from the coronavirus pandemic in a strong position.

In an interview with CNBC's "Squawk Box," he said Target's investments in online shopping options and its workforce will lead to "market share gains that I think will benefit the brand for years to come."

Since its fiscal first quarter began Feb. 2, Target's same-store sales have risen more than 7%, the retailer said. The gain, which compares with an increase of 1.5% in the fiscal fourth quarter, is the result of a doubling of its online sales, partially offset by declines inside its nearly 1,900 brick-and-mortar stores.

Cornell did not provide any specific estimates for its quarterly earnings. But he said higher labor costs, the sale of more low-margin items and write-downs of inventory in apparel and accessories because of a drop in sales will weigh on profits.

Target is spending more on worker pay and benefits. The company said it's already spent more than $300 million on coronavirus-related employee expenses, such as paid sick leave.

Those costs will continue to rise. On Thursday, the retailer announced plans to extend its $2 an hour temporary pay increase for store employees, additional child care benefits and paid leave policy for older or at-risk members of its workforce until May 30 — an acknowledgment that the retailer doesn't expect business to return to usual for many more weeks or months.

Moody's retail analyst Charlie O'Shea said in a statement Target's update gives a clearer picture of a complex retail environment where customers shop differently and skip over some items altogether.

He said its mix of items sold and the drop in apparel sales "indicates that consumers, once they decide to go to the store or hit the website, are focused on efficiency and 'needs vs wants'."

Michael Baker, a Nomura Instinet retail analyst, said the stock market's reaction is due to whiplash from volatile sales numbers and the company's margins getting squeezed. He said investors are trying to figure out customers' purchasing patterns, as Target's sales show a progression from "pantry loading a little bit, then taking a rest, then shopping again, but on the online side of it."

But he said he thinks the stock's downturn is "more of a blip." He said Target is set up well with its online business.

"Nothing we are seeing here is permanent, except maybe Target picking up new customers," he said.