Shares in Target climbed by a tenth as the US retailer capped a record year in 2021 and said it expected to build on the growth it generated during the pandemic.

The Minneapolis-based retailer forecast low- to mid-single digit sales growth in 2022, compared with analysts’ expectations for the year of about 2.2 per cent. Target on Tuesday predicted adjusted earnings per share will rise by high-single digits.

Beyond this year, the company predicted revenues will grow in the mid-single digits, while adjusted earnings will grow in the high-single digits.

“We are a growth company and we will continue to grow in 2022 and beyond,” chief executive Brian Cornell said on CNBC on Tuesday. “We’re going to continue to invest in growth.”

The quarter “capped off a year of record growth”, Cornell said in Tuesday’s statement, reinforcing the “durability of our business model and our confidence in long-term profitable growth”.

Target’s shares gained 11 per cent in early trading on Tuesday.

Consumers are becoming more price-conscious as inflation has accelerated to the highest rate in four decades, driving more shoppers to seek discounts at Target and other large chains that are better able to navigate supply chain and labour disruptions. Walmart, which reported an unexpected increase in sales for the holiday quarter, said last month its stores were offering roughly the same number of price “rollbacks” as they did at the end of the first quarter last year.

However, some retailers including Home Depot and Macy’s have cautioned that higher costs for merchandise, shipping and labour will squeeze profits further this year.

Big-box stores where shoppers can stock up on everything from groceries and cleaning supplies to video games and kids’ clothing generated robust sales during the pandemic, particularly as consumers favoured home delivery and kerbside pick-up options. Target, as a purveyor of essential goods, remained open during stay-at-home orders in 2020.

The company’s revenues increased by nearly $28bn, or 35 per cent, over the past two years during the pandemic. Its full-year sales rose to $106bn.

Fourth-quarter earnings at Target advanced to $3.19 a share on an adjusted basis, beating Wall Street’s estimate of $2.86 and up from $2.67 a year earlier, the group said in a statement on Tuesday. Sales increased 9.4 per cent to about $31bn, slightly below Wall Street’s expected $31.4bn in revenues.

Comparable store sales rose 8.9 per cent and digital sales increased 9.2 per cent in the holiday quarter that ended on January 29, compared with a year earlier.

Target on Monday said it would invest $300mn more on its workforce this year to boost pay and other benefits as American companies compete to lure back workers. It added it would raise its starting wage for hourly workers from $15 to a range of $15 to $24 an hour.

Target, like its rivals, has been hit by increased supply chain costs. Target’s gross margin rate shrank to 25.7 per cent compared with 26.8 per cent in 2020 in the fourth quarter, because of higher freight and merchandising costs and increased compensation and headcount.

“We see supply chain constraints that are steadily working themselves out but will likely take more time,” said Cornell on a call with investors. “Both of which are made more uncertain by the crisis in Ukraine.”