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Posted: Tue 22:55, 27 Aug 2013 Post subject: Jason Wu spark a 7-spun2 |
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Jason Wu spark a 7
The unseasonably the sunshine has warmed Target Corp.'s registers,[link widoczny dla zalogowanych].
The Minneapolis-based retailer said Thursday that sales at stores open not less than annually in February jumped a strong 7 percent, because of its Jason Wu collection and also the throngs of individuals venturing outside to go shopping. Wall Street had expected a 5 percent gain.
"February sales were well above our expectations because of stronger-than-expected guest traffic combined with a solid rise in transaction size," CEO Gregg Steinhafel said inside a recorded call. "We're very pleased with the pace in our sales since the holiday season."
For Target and its investors,[link widoczny dla zalogowanych], the question is whether January,[link widoczny dla zalogowanych], in which the retailer posted a 4.1 percent same-store sales gain, and February were anomalies or a sign of good things in the future. Both months typically yield the tiniest sales of the season.
With few exceptions,[link widoczny dla zalogowanych], major retailers have benefited from the mild winter -- from luxury retailer Nordstrom Inc. (+10.2 percent) to lower-tier department store Ross Stores Inc. (+9 percent). Even long-suffering Gap Inc. reported a 4 percent same-store sales increase.
"The insufficient snowstorms, particularly in the Northeast, gave us better [consumer] traffic patterns," said Judith Russell,[link widoczny dla zalogowanych], editor of the Robin Report, a newsletter that tracks the retail industry. "The the sunshine got people in the mind to buy spring items."
Target also enjoyed a nice lift from the limited-edition Jason Wu collection, whose rollout went considerably smoother than last year's Missoni debut. Coupled with its PFresh grocery format and 5 percent Redcard discount program, the Wu collection helped Target drive sales across all its departments.
"Although the [Wu] collection had less [product] than Missoni, it created buzz and would be a runaway success," David Strasser, a retail analyst with Janney Capital Markets, wrote in a research note.
Target said same-stores sales in food and household essentials, including health and beauty, increased within the low teens and mid-single digits respectively. Comparable sales in apparel and accessories grew slightly above 7 percent, led by double-digit growth in women's clothing,[link widoczny dla zalogowanych], performance active wear and men's apparel.
Even the retailer's struggling hardlines segment, including electronics and entertainment, saw a little same-store sales increase,[link widoczny dla zalogowanych], led by music,[link widoczny dla zalogowanych], books and movies. Target's exclusive DVD edition of "Twilight: Breaking Dawn" and special re-release of Grammy-winning singer Adele's sophomore album certainly helped Target's cause.
However, many analysts think Target's same-store sales momentum isn't sustainable. Morgan, wrote in a recent research note. "Should we believe the most crucial 8 weeks of the season [holiday shopping] . or two of the tiniest months of the season [January and February] that have benefited significantly from weather?"
Even Steinhafel sought to temper expectations. Despite Target's strong performance in early 2012,[link widoczny dla zalogowanych], the company still expects same-store sales for the first three months of the year to increase 4 %,[link widoczny dla zalogowanych], he explained.
But Target is clearly about the upswing. Since October 2011, Target stock has jumped nearly 16 percent. On Thursday, Target shares rose 7 cents to shut at $56.76.
Russell, of the Robin Report, said the economy will likely continue to improve, which will help all retailers.
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