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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 transactions. 

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 period.

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 $38.5 billion.

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 events.

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.

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