Target Corp. says urban shoppers who take advantage of the same-day delivery service in small-format stores buy way more items than those who buy and carry out.

The retailer offers the option for shoppers to purchase their items and then arrange for delivery at a time of their choosing for a $7 flat fee.

“Once we solve the problem of carrying the order home, it frees them up to shop more, a lot more,” said John Mulligan, Target’s TGT, +0.65% chief operating officer, on the earnings call, according to a FactSet transcript. “Average basket size on these orders is more than five times bigger than the average for these locations, and they include a very strong mix of items from our home category.”

The home category was one of the areas where Target saw 3% same-store sales growth in the first quarter. Overall, same-store sales grew 4.8%.

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Now that Amazon.com Inc. AMZN, +0.66% has made a Prime member promise to delivery orders in one day rather than two, the competition have been even more vocal about the delivery options they offer that can match that convenience.

Target, like Walmart Inc. WMT, +0.52% , is leveraging its network of stores, with drive-up, which makes digital orders available to customers without leaving the parking lot, order pickup from stores, and same-day delivery through Shipt. The retailer said same-day fulfillment options drove more than a quarter of first-quarter same-store sales.

Target reported a 42% increase in comparable digital sales, with more than 80% of the digital volume fulfilled in stores, which, the company emphasized, drives down costs.

Last year, digital accounted for $5 billion in sales, Mulligan said, and about two-thirds of that volume was filled in stores.

“Despite the success we’re already seeing, we continue to hear questions about the long-term viability of keeping our stores at the center of fulfillment,” he said. “Our answer is empathic: we are confident that this is the best long-term solution for Target.”

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With traffic heading to stores, Target Chief Executive Cornell talked about the continued remodels that are taking place nationwide: 53 in the last quarter with the company on track for 300 this year. Seven small-format stores opened during the quarter as well.

“One of the success stories at Target has been the revitalization of physical stores, many of which have been refurbished and are providing a much more pleasant and engaging shopping experience,” said Neil Saunders, managing director at GlobalData Retail.

“This along with improvements to the ranges put into stores – particularly in apparel and beauty – have made them more compelling destinations leading to an increase in shopper traffic.”

Traffic growth was 4.3% for the quarter.

Target’s focus on these same-day options are giving it an edge.

“As much as this model is advantageous for driving sales, it is also very positive for margins as store-based fulfillment is more profitable than delivery to home,” Saunders wrote. “This is one of the reasons Target has been able to engineer better bottom line numbers.”

Taken together, Charlie O’Shea, Moody’s lead retail analyst, thinks Target will be a top U.S. retail performer, even as the threat of tariffs looms.

“Target hit the bull’s-eye in Q1, with every meaningful measure demonstrating the soundness of its revamped strategy and its successful execution,” said O’Shea. “The continued rollout of exclusive brands is driving both store and website traffic, and despite a brutal pricing environment due to the ongoing Walmart/Amazon market share battle, margins are holding steady.”

Like Walmart, Target has warned that higher tariffs will lead to higher prices for customers.

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“As a guest-focused retailer, we’re concerned about tariffs because they lead to higher prices on everyday products for American families,” said Target’s Cornell. “Our team continues to monitor trade negotiations and develop contingency plans to help mitigate the impact of tariffs on our guests and on our business.”

Quo Vadis President John Zolidis is also bullish.

“We feel confident that Target is well-positioned to continue to win, especially as many other financially constrained competitors fold up shop including Toys ‘R’ Us, Gymboree, Payless ShoeSource and Dressbarn just to name a few recent liquidations,” he said. “We believe investors have looked past Target’s recent sales momentum due to its modest overall growth profile and perceived inability to avoid further margin contraction.

“Post 1QFY19, we think Target’s outperformance on the top line is harder to ignore,” said Zolidis.