Target Corporation
(
TGT
) posted healthy sales results for the four-week period ended July
28, 2012. Target, the operator of general merchandise and food
discount stores in the United States, registered an increase of
3.1% in comparable-store sales for July 2012, driven by a rise in
average transaction size coupled with an increase in
comparable-store transactions.
However, sales were well below an increase of 4.1% marked in
July 2011. In terms of performance, Target also lagged its peer,
Costco Wholesale Corporation
(
COST
), which witnessed an increase of 5% in comparable store sales
during the period under review.
The company stated that net retail sales for July increased 3.2%
to $4.99 billion from $4.84 billion reported in the year-ago
period.
Category-wise, Target reported solid sales in Food, with Health
& Beauty increasing in the mid-single-digits. Apparel sales
marked a marginal increase, while sales of Hardlines and Home
witnessed a downfall. Alongside, the company registered a rise in
sales in every region.
Minneapolis-based Target Corporation also announced that
comparable store sales for the second quarter of 2012 increased
3.1% along with a 3.5% rise in net sales to $16.45 billion.
Management noted that the company's second quarter sales were in
line with its expected growth range.
Year-to-date, Target registered a 4.2% increase in
comparable-store sales with a 4.8% rise in net retail sales to $33
billion.
Going forward, the company expects comparable-store sales to
increase in low- to mid-single-digits for August 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 #3 Rank, which translates into a
short-term Hold recommendation. Additionally, we have a long-term
Neutral rating on the stock.
COSTCO WHOLE CP (COST): Free Stock Analysis
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TARGET CORP (TGT): Free Stock Analysis Report
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