Target recorded a 7.2% increase in chain-wide store visits in the third quarter, Placer.ai data show, marking some of the strongest year-over-year traffic growth in retail as the chain enters a pivotal holiday season. Same-store visits rose 5.9% over the same period, according to the foot traffic analytics firm.

The numbers position Target favorably against its largest rival. Advan Research measured a 4.7% year-over-year increase in Target's third-quarter foot traffic, compared with 1.7% at Walmart. Both retailers report quarterly earnings next week.

What is driving the traffic gains?

The visits reflect a turnaround effort nearly three fiscal quarters old, led by new CEO Michael Fiddelke. His early bets — tighter store operations and an initial refresh of categories such as food and beauty — appear to be paying off, analysts said.

"They picked off some of the easiest, low-hanging fruit to begin with," Mizuho analyst David Bellinger told Business Insider. He also credited the retailer for engaging viral cultural moments, including the 30th anniversary of Pokemon, which drew lines of shoppers outside stores.

The frequency data underlines the shift. Roughly half of Target shoppers visited twice a month or more, and nearly one in eleven visited five times or more, Placer.ai found.

What remains unfixed?

The harder work has not started, Bellinger said. "The real parts of the store that Target needs to fix, they haven't touched yet, so that's mainly home and apparel where you get better margins," he said. "If those categories turn, then the Target turnaround is fully in force."

Replicating past success in those higher-margin categories may prove difficult. Bank of America analyst Chris Nardone wrote in a note earlier this week that Walmart has become a more formidable competitor in home and apparel in recent years.

Will value positioning protect Target?

Macroeconomic pressure adds risk. A recent bump in inflation, paired with stalling wage growth, could signal a difficult road ahead for retailers. Jefferies analyst Corey Tarlowe told Business Insider that Target has moved proactively to deliver strong value for shoppers' dollars.

"If we are in an environment where, let's say, the consumer needs to turn a little bit more toward a value focus, Target plays well into that," Tarlowe said. He added that the company has been regaining its trademark balance of affordability and style.

What about the October slowdown?

Some investors have flagged an apparent slowdown in traffic growth during October. Bellinger attributed the dip to an exceptionally strong September and to tougher year-ago comparisons, rather than fading demand.

The stakes remain high. This holiday quarter is Fiddelke's first as chief executive, making execution over the coming weeks a critical test of the turnaround.

"They definitely have a lot of momentum going into the holiday. The stores are a lot cleaner. They're a lot sharper. Better staffed. So it seems like they're on pace for a good holiday," Bellinger said.

How is Target structuring the season?

Chief Merchandising Officer Cara Sylvester outlined the company's strategy at a media briefing last month. Target is taking a high-cadence approach — a rapid cycle of refreshed merchandise — designed to keep shoppers returning more often through the season.

"It's one thing to set product in November and then forget about it and have it sell down. We want to have that consistent newness," Sylvester said. "Right up until the end."