) recently posted comparable-stores sales growth for the four-week
period ended April 28, 2012. The comparable-store sales for April
rose 1.1% compared with an increase of 13.1% in the prior-year
period. Total retail sales increased 2.1% to $4,978 million from
$4,874 million in the comparable period last year.
However, comparable-stores sales for the first quarter 2012
jumped 5.3% compared with 2% in the prior-year quarter, while net
retail sales climbed 6.1% to $16,537 million.
Looking at the performance, the company has experienced robust
quarterly comparable-stores sales for the first time in more than
six years, primarily due to the combination of early Easter and
favorable weather conditions during the quarter.
Management cited Target's P-fresh remodel program and 5% REDcard
Rewards program as the primary growth drivers during the
One of Target's competitors,
Costco Wholesale Corporation
) registered an increase of 4% in comparable-store sales for the
four weeks ended on April 29, 2012 with a rise of 7% in net sales
to $7.25 billion compared with $6.80 billion in the last year
Target is one of the largest operators of general merchandise
and food discount stores in the United States. The company's
efficient marketing, multi-channel strategy, product innovation,
compelling pricing strategy and new merchandise assortments, should
help drive comparable-store sales and operating margins in the long
Going forward, the company will focus more on store renovations
and improving store sales productivity. Target plans to sustain its
remodeling program at existing general merchandise locations in
However, the economy has not yet recovered fully. It is evident
that the company's customers remain sensitive to macroeconomic
factors, including interest rate hikes, increase in fuel and energy
costs, credit availability, unemployment levels and high household
debt levels, which may affect their discretionary spending, and in
turn curtail the company's growth and profitability.
Moreover, a greater concentration of the company's revenue
generating capabilities in limited regions of the United States
poses a competitive threat to Target.
Currently, Target carries a Zacks #3 Rank, which translates into
a short-term Hold rating. Considering the fundamentals, we have a
long-term Neutral recommendation on the stock.
COSTCO WHOLE CP (COST): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
To read this article on Zacks.com click here.