Updated to include comments from Target's media call.

Thanks to increased promotions during the holidays, Target (TGT) - Get Target Corporation Report  missed Wall Street's profit bulls-eye. 

On Wednesday, the Minneapolis-based retailer reported adjusted earnings of $1.52 a share, falling shy of forecasts of $1.54 a share. The result was near the mid-range of Target's guidance of $1.48 to $1.58 a share.  

In what was a very competitive holiday season due to tepid consumer spending and a decelerating U.S. economy, Target looks to have sharpened its prices to bring in shoppers. Target's gross profit margin came in at 27.9%, down from 28.5% a year earlier, with the company calling out "investments in promotions" as the culprit for the drop. Wall Street was estimating a gross margin of 28.3%.

"The consumer is consistently inconsistent," said Target executive vice president and CFO Cathy Smith in a call with media.

Target guided to full year earnings of $5.20 to $5.40 a share compared to Wall Street estimates for $5.17 a share.

Shares of Target rose about 3.2% in mid-day trading on Wednesday.

TheStreet dives into several of the top takeaways from Target's latest.

1. Target's same-store sales beat estimates...and those of key rivals.

Target's promotions helped fuel a 1.9% same-store sales increase, besting estimates for a 1.5% gain and trumping the 0.6% same-store sales gain seen at Walmart's U.S. division. Target's store traffic rose 1.3%, outpacing the 0.7% increase for Walmart, and has now increased for five straight quarters.

Target's sales also thumped the 4.3% decline delivered by department store Macy's (M) - Get Macy's Inc Report . In particular, Target said sales of apparel outpaced the company average during the fourth quarter.  

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2. Target steals the show online.

Aggressive promotions on Apple (AAPL) - Get Apple Inc. (AAPL) Reportproducts, discounts on toys based on Disney's (DIS) - Get Walt Disney Company ReportStar Wars and free shipping on all orders caused Target's digital sales to surge 34% year over year. The result market a quicker pace than the 20% growth logged in the third quarter. The digital sales increase did lag the company's long-term guidance calling for 40% growth, however.

Target's digital performance crushed those of its major competitors. 

Walmart, for example, said global e-commerce sales grew approximately 8% in the fourth quarter, cooling from a 10% growth rate in the third quarter. Execs declined to share the growth rate in the U.S. 

Target's digital growth even outdid that of online juggernaut Amazon (AMZN) - Get Amazon.com, Inc. Report , which saw sales in the U.S. rise about 24% in the fourth quarter.

3. Wage hikes may be in the offing.

When asked if Target's guidance included money to raise wages for retail workers, Smith did not rule it out. "We will be competitive on wages and will assess them market by market," Smith told TheStreet.

Target may be forced to match the wage actions recently taken by Walmart.

On Feb. 20, Walmart raised its minimum wage for store workers hired before Jan. 1 to at least $10 per hour from $9 an hour. New entry-level workers will continue to start at $9 an hour, but can move to $10 an hour in as soon as six months by going through a training and development program.

Walmart workers who already earn more than $10 an hour will receive a pay increase this month of about 2%, according to the company, rather than having to wait until his or her anniversary date. The average hourly wage for full-time Walmart associates (hourly only, no salaried associates included) is $13.38 an hour, and $10.58 an hour for part-time employees. The Federal minimum wage currently stands at $7.25 an hour.

According to


, the average Target cashier earns about

$9.03 an hour