) posted soft sales results for the five-week period ended June 30,
2012. Target, the operator of general merchandise and food discount
stores in the United States, registered an increase of 2.1% in
comparable store sales for June 2012, driven by a rise in average
However, sales were well below an increase of 4.5% marked in
June 2011. In terms of performance, Target also lagged its peer,
Costco Wholesale Corporation
), which witnessed an increase of 3% in comparable store sales
during the period under review.
Management noted that the company's June sales were at the lower
end of its expected growth range.
Category wise, Target reported solid sales in Food, with health
and beauty increasing in mid-single-digit. Apparel sales marked an
increase of low-single-digit, while sales of hardlines and home
witnessed a downfall. Alongside, the company registered rise in
sales in every region.
Minneapolis, Minnesota-based Target Corporation announced that
net retail sales for June increased 2.6% to $6.4 billion from $6.3
billion reported in the year-ago period.
Year-to-date, Target registered a 4.4% increase in comparable
store sales with a 5.1% rise in net retail sales to $28
Going forward, the company stood by its earlier guidance and
expects adjusted second-quarter 2012 earnings between $1.04 and
$1.14 per share. Management also projected comparable-store sales
growth of 3% in the U.S. retail segment.
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 protect the company from any unprecedented
Currently, Target holds a Zacks #2 Rank, which translates into a
short-term 'Buy' recommendation. However, considering the
fundamentals, we have a long-term 'Neutral' rating on the
COSTCO WHOLE CP (COST): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
To read this article on Zacks.com click here.