The past year has been a choppy one for big-box retailer Target. Last Christmas season dealt a major sales blow after the retailer was hit by a massive data breach. In the early part of 2014, sales continued to slump as Target worked to regain shoppers’ trust and grappled with challenges facing the broader retail industry: Consumers are still cautious about their spending, and promotional prices seem to be the only thing that gets them to open their wallets.

But Target’s third-quarter earnings, announced Wednesday, showed the company has made significant strides in turning around its business, giving it momentum going into this year’s holiday shopping season.

Target said sales at stores open more than a year increased 1.2 percent, an uptick that beat the company’s own forecast of flat to 1 percent sales growth. Its profit rose 3.1 percent to $352 million.

The Minneapolis-based retailer said that lower gas prices likely encouraged consumers to spend more this quarter, though chief financial officer John Mulligan said during a conference call that Target couldn’t make a direct correlation between its own sales improvement and lower prices at the pump. Target also said it was able to pull back significantly on the heavy discounts and promotions it had been offering earlier in the year, perhaps a sign that consumers’ fatter wallets were making them somewhat less price-sensitive.

Target said that event-based shopping for back-to-school and Halloween were crucial to sales growth this past quarter.  The retailer’s chief rival, Wal-Mart, also pointed to those events as a tailwind in the most recent quarter.

As for last year’s data breach, Target said it is finally in the rearview mirror. The company has absorbed what it believes are the “vast majority” of financial charges related to the breach, Mulligan said, and customer surveys show that shoppers have largely returned to the stores.

“We feel like we’ve really moved past the breach, and our guests moved past it more quickly than, frankly, some of those who write about us,” Mulligan said.

While Black Friday is just around the corner, Target and plenty of other retailers have already started pitching promotions and deals to get shoppers in the Christmas spirit.  Last month, Target began offering free shipping on all holiday-season purchases, a policy typically reserved for purchases over $50.  The company said Wednesday that it has seen a “significant increase” in online orders since the shipping announcement.

Target’s stock shot up nearly eight percent in Wednesday morning trading.

Despite the encouraging signs in the third quarter’s earnings report, the retailer still has plenty of ground to make up as it aims to heal its business.  Although sales improved in the quarter, foot traffic was down 0.4 percent in Target’s U.S. stores.  And the company’s has acknowledged its expansion into Canada remains troubled.  Customers there have been disappointed by a narrow assortment of merchandise and frequent issues with items being out of stock.

This was Target’s first quarter under the leadership of chief executive Brian Cornell, a former Pepsi executive who replaced Gregg Steinhafel in August.  In a call with investors Wednesday, Cornell outlined some of his plans for strengthening the company, including sharpening Target’s focus on its “signature categories”– baby, kids, wellness and style.   The company will put a higher share of its marketing and product development muscle behind these departments, Cornell said.

Cornell stressed this was not an indication that Target is giving up on categories such as groceries, but, he said, “we’ll have different expectations in those categories.”

Target also expects to implement more customization and localization to each individual store, instead of keeping a homogeneous look across the country.