In late 2017, retailer Target Corp (NYSE:TGT) announced an acquisition to help boost its delivery and digital sales. The acquisition proved to be one that helped power the company’s growth during the COVID-19 pandemic and has also rewarded shareholders since the time of the announcement.

What Happened: On Dec. 13, 2017, Target announced it was acquiring Shipt, a leader in same-day delivery. The $550 million purchase was part of Target’s strategy to improve its fulfillment capabilities for customers.

Target said it would bring same-day delivery to half its stores in 2018 and offer same-day delivery at the majority of its locations in time for the 2018 holiday season.

“With Shipt’s network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country,” Target Chief Operating Officer John Mulligan said at the time.

Related Link: Why Pete Najarian Bought More Target Stock Today

Investing $1,000: Shares of Target traded as high as $62.83 on the day of the Shipt acquisition announcement.

A $1,000 investment in Target stock could have purchased 15.92 shares. The $1,000 investment would be worth $3,513.23 today based on a current price of $220.68, representing a gain of 251%.

The $1,000 investment would have produced an average annual return of around 63% over the last four years.

What’s Next: Shipt operates as a wholly-owned independent company under the Target brand. Owning Shipt helps Target offer same-day delivery services to its customers. Shipt also has a large network of partners that include Bed Bath & Beyond (NASDAQ:BBBY), Best Buy Co (NYSE:BBY), Costco Wholesale Corp (NASDAQ:COST), CVS Health (NYSE:CVS), Kroger Co (NYSE:KR), Meijer and more.

Shipt could see tremendous growth from Target and other retailers as more consumers choose to shop from home and use their service. Valued as a stand-alone business, Shipt is likely worth more than the original purchase price, which could be a future catalyst for Target. 

Target reported fiscal 2022 revenue of $106 billion, up 35% over the last two years. Full-year same-store sales were up 12.7%. Digital sales continued to see strong growth in the fourth quarter and full fiscal year and were highlighted in the earnings report.

Target is guiding for mid-single digit revenue growth for fiscal 2023 and beyond, which could get a boost from the growth of Shipt.

TGT Price Action: Target shares have traded between $166.82 and $268.98 over the last 52-weeks.

Target was up 9.84% on Tuesday, closing at $219.43.