Target sales growth misses forecasts

Target sales growth misses forecasts
CHICAGO, Aug 31 (Reuters)
© Reuters Limited


Target on Thursday posted a smaller-than-expected 2.8 percent increase in August sales at its stores open at least a year, marking the second consecutive month that its sales growth missed Wall Street forecasts.

Analysts, on average, had expected the discount retailer to report a same-store sales gain of 3.1 percent, according to a Reuters survey.

Total sales for the four-week period that ended Aug. 26 rose 9.2 percent to $4.22 billion.

On a recorded message, Target said women’s apparel, home decor, jewelry and accessories were among the weakest categories. The strongest performers included newborn, infant and toddler merchandise, pharmacy, food and toys.

The disappointing performance comes as Wall Street is watching closely for signs that a spending slowdown is spreading among middle-class consumers as the U.S. housing market cools.

Lower-priced retailers such as Wal-Mart Stores Inc. have been saying for months that steep gasoline prices were curbing spending, particularly among low-income consumers, but chains that cater to wealthier shoppers had seen less of an impact.

Target’s same-store sales growth was only slightly better than Wal-Mart’s 2.7 percent August gain.

Target said it expects September same-store sales growth in the range of 3 percent to 5 percent, while Wal-Mart forecast 1 percent to 3 percent growth for the month.