For the second month in a row Target’s same-store sales were nearly double the expected amount and the company increased its first quarter guidance as a result.
Same-store sales increased 7.3%, with half of the increase driven by growth in average transaction size combined with an increase in comparable-store transactions. Overall comparable-store sales in March 2011 decreased 5.5%.
“March sales were well above our expectations, reflecting a healthy underlying trend combined with the benefit of an earlier Easter and favorable weather this year. We’re now planning for a revised first-quarter comparable-store sales increase of 5% to 6%, reflecting a low-to-mid single-digit increase in our April comparable-store sales,” said Target chairman, president and CEO Gregg Steinhafel.
As a result of stronger-than-expected sales through March, the company currently expects first quarter 2012 adjusted EPS of $1.04 to $1.10, compared with prior guidance of 97 cents to $1.07. The company expects GAAP EPS of 96 cents to $1.02, compared with prior guidance of 88 cents to 98 cents. The 8-cent difference between the updated ranges represents the EPS impact in the first quarter of expected expenses related to the company’s Canadian market entry slightly offset by the favorable resolution of income tax uncertainties.
March comparable-store sales in food increased in the mid teens. Comparable-store sales in household essentials increased in the mid single-digit range, with the strongest performance in health care. Comparable-store sales in apparel and accessories increased in the low double-digit range, with strong performance across all categories and particular strength in boy’s and girl’s apparel. Comparable-store sales in hardlines increased in the low single-digit range, with the strongest performance in toys and the softest performance in electronics. Comparable-store sales in home increased in the low single-digit range, with the strongest performance in seasonal categories and the softest performance in decorative home.
In March, every region experienced a healthy increase in comparable-store sales.