Target Corporation ( TGT ),
posted strong sales results for the four-week period ended August
25, 2012. Target, the operator of general merchandise and food
discount stores in the United States, registered an increase of
4.2% in comparable-store sales for August 2012 compared with a 4.1%
rise in August 2011, driven by an elevation in average transaction
size coupled with an increase in comparable-store
However, in terms of performance, Target lagged its peer,
Costco Wholesale Corporation ( COST ),
which witnessed an escalation of 6% in comparable store sales
during the period under review.
The company stated that net retail sales for August increased
4.7% to $5.5 billion from $5.3 billion reported in the year-ago
Category-wise, Target reported solid sales in Food, with Health
& Beauty augmenting in the mid-single-digits. Apparel sales
increased in line with the company's average, while sales of
Hardlines and Home witnessed a low single-digit surge. Alongside,
the company registered a rise in sales in every region.
Year-to-date, Target registered a 4.2% increase in
comparable-store sales with a 4.8% rise in net retail sales to
Going forward, the company expects comparable-store sales to
increase in the low- single-digits for September 2012.
Target's efficient marketing, multi-channel strategy, product
innovation, compelling pricing strategy, and new merchandise
assortments, are expected to drive comparable-store sales and
operating margins in the long term.
Moreover, Target's P-fresh remodel program, 5% REDcard Rewards
program, City Target stores, The Shops at Target initiatives and
foreign ventures safeguard the company from any unprecedented
Currently, Target holds a Zacks #2 Rank, which translates into a
short-term Buy recommendation. However, we have a long-term Neutral
rating on the stock.
COSTCO WHOLE CP (COST): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
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