July comp 2%, more of the same in Aug.
A 2% same-store sales increase in July fell within the company’s guidance range, and Target is expecting its August same-store sales to also fall in the low single-digit range. It’s hard to get too excited about a low single-digit July increase when sales from the prior year comparison period declined 6.5%, but what’s more exciting for Target shareholders is the revelation that all of the growth in same-store sales was due to increased customer traffic, which offset a slight decline in average transaction sizes.
“Store traffic and apparel sales were strong, and we continued to experience soft sales in electronics, video games, music and movies,” said Gregg Steinhafel, Target chairman, president and CEO. “Retail segment expenses remain well-controlled, and profitability in our credit-card segment continues to be strong. Our team continues to focus on disciplined execution of our strategy in an uncertain environment.”
The food category experienced a double-digit increase while healthcare and beauty increased in the mid single-digit range. Comparable-store sales performance in apparel was somewhat above the company average, led by high single-digit increases in ladies’ and men’s apparel, with the softest performance in children’s apparel. According to the company, comparable-store sales in hardlines declined in the mid single-digit range, with the strongest performance in sporting goods, and the softest performance in music, movies and books, along with electronics including video games. Comparable-store sales in home were down slightly, with the strongest performance in housewares, and the softest performance in domestics.