MINNEAPOLIS — The first month of Target’s third quarter is off to a solid start as the company reported a 4.1% same-store sales increase squarely in the middle of guidance that called for a low to mid single-digit gain.
The increase was driven primarily by growth in average transaction size with a lesser contribution coming from an increase in comparable-store transactions. The 4.1% increase comes on top of a prior year increase of 1.8%. The company said every region of the country experienced a healthy increase in comparable-store sales, but there was a noticeable sales acceleration in the Eastern U.S. late in the month in advance of Hurricane Irene. Target estimated the acceleration added about a half percentage point to August comps and forecast that September comps would likely be negatively affected by a similar amount. Even so, the company maintained the monthly forecast that has been in place for most of the year, which calls for a comp increase in the range of low to mid single digits.
“August comparable-store sales were in line with our expectations, reflecting solid results in our back-to-school and back-to-college categories,” said Target chairman, president and CEO Gregg Steinhafel. “While the pace of the economic recovery is uneven and uncertain, we are confident in our ability to execute on our strategy, to offer the right balance of extraordinary value, convenience, newness and differentiation and to remain our guests’ preferred shopping destination.”
As has been the case with prior monthly and quarterly sales reports, Target said August comparable-store sales in grocery increased in the mid to upper teens, while health care, beauty and household essentials increased in the mid single-digit range. Another area of increase was apparel, which was up slightly led by double-digit increases in the intimate, hosiery and performance segments. The company said same-store sales in hardline categories declined in the low single-digit range, and home categories declined slightly.