Thursday, Target Corp. (TGT), an operator of general merchandise and food discount stores, reported a 1.2% decline in comparable store sales for the month of July. However, the company's total sales for the month were up 4.7%.
For the year-ago month, Target had reported comparable store sales growth of 6.1%. The company's net retail sales for July increased to $4.57 billion from $4.36 billion last year.
According to Target's Chief Executive Officer Gregg Steinhafel, the company's comparable store sales performance in July was near the low end of its -1% to +1% planned range.
For the month of June, Target reported a 0.4% increase in comparable store sales. Net retail sales for the period increased 6.6% to $5.84 billion
For the quarter-to-date period, the company's comparable store sales dropped 0.4%, whereas it rose 4.9% in the prior-year period. Total sales increased 5.7% to $14.97 million.
The company also reported a 0.6% decline in year-to-date comparable store sales in comparison with a 4.6% rise in the previous year. Sales reached $29.27 million, up 5.3% from the same period last year.
Target's retail segment includes large, general merchandise and food discount stores, and on-line business called Target.com. In addition, the company operates a credit card segment that offers branded proprietary and Visa credit card products. The company currently operates 1,648 Target stores in 47 states.
Among Target's competitors, Wal-Mart Stores, Inc. (WMT) said Thursday that sales at established locations in the month of July increased 3% from last year, excluding the impact of fuel sales. Including the impact of fuel, U.S. comparable store sales increased 3.7%. The company had expected U.S. comparable store sales for the month to increase between 2% and 4%, excluding the impact of fuel.
Wal-Mart's net sales for the month increased 9.4% to $30.16 billion from $27.58 billion in the same period last year.
Meanwhile, warehouse operator Costco Wholesale Corp. (COST) has recently reported a 10% increase in comparable store sales for the month of July, benefited primarily by the gasoline price inflation and favorable exchange rates. Net sales for the month increased 14% to $5.70 billion from $5.02 billion in the previous year four-week period.
Target is scheduled to announce its second-quarter results on August 19. Wall Street analysts forecast earnings of $0.76 pr share on sales of $15.49 billion.
In a client note published on July 23, Credit Suisse analyst Exstein downgraded Target shares to Neutral from Outperform and lowered its price target to $50 from $60. The brokerage also reduced its 2008 earnings per share estimate to $3.30 from $3.45. The downgrading was based on the continued deterioration of the company's credit business.
TGT is trading at $46.224, down $1.77, on a volume of 2.33 million shares.
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