Easter holiday and a favorable weather well guided
Target Corporation
(
TGT
) to post strong sales results for the five-week period ended March
31, 2012.
Target, the operator of general merchandise and food discount
stores in the United States, registered an increase of 7.3% in
comparable store sales for March 2012, in contrary to a 5.5%
decline in the prior-year period. In terms of performance, target
exceeded its peer,
Costco Wholesale Corporation
(
COST
), which witnessed an increase of 6% in comparable store sales
during the period under review.
Management noted that the company's March sales surpassed its
expected growth range, reflecting an increase in average
transaction size coupled with a rise in comparable store
transactions.
Category wise, comparable store sales were strongest in health
care, with food increasing in the mid teens, while household
essentials grew in the mid single-digit range. Apparel and
accessories marked a low double-digit increase, while hardlines
increased in the low single-digit range. Alongside, the
company witnessed increased sales in every region.
Minneapolis, Minnesota-based Target Corporation announced that
net retail sales for March increased 7.9% to $6,427 million from
$5,955 million reported in the prior-year period.
Year-to-date, Target registered a 7.2% increase in comparable
store sales with an 8% rise in net retail sales to $11,559
million.
Buoyed by the better-than-expected results, Target has raised
its first-quarter 2012 bottom line forecast. The company now
expects first quarter earnings to range from $1.04 to $1.10 per
share versus its earlier guidance of 97 cents to $1.07. The
current Zacks Consensus Estimate for the quarter stands at 97 cents
per share.
Going forward, Target expects comparable store sales to increase
in low- to mid-single-digit range for April 2012.
Currently, Target holds a Zacks #3 Rank, which translates into a
short-term 'Hold' recommendation. Considering the fundamentals, we
have a long-term 'Neutral' rating on the stock.
COSTCO WHOLE CP (
COST
): Free Stock Analysis Report
TARGET CORP (
TGT
): Free Stock Analysis Report
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