Target's June revenue figure beats expectations

AP News
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Posted: Jul 07, 2011 9:24 AM
Target's June revenue figure beats expectations

Target Corp. said Thursday that revenue at stores open at least one year rose 4.5 percent in June as shoppers picked up groceries and seasonal merchandise.

The comparison is key because it excludes results from stores that recently opened or closed. Analysts surveyed by Thomson Reuters expected a smaller 3.2 percent rise.

Target's shares climbed $3.41, or 7 percent, to $51.85 in premarket trading.

The discount retailer says its grocery category was its strongest performer. Target has been expanding its grocery selection, particularly with investments in its "P-Fresh" fresh-food program. Health and beauty products and clothing basics like tights and underwear were also strong. Movies, books and home decor were weaker.

The strong results echoed other retailers reporting June results on Thursday _ stores like Costco Wholesale Corp., and Victoria's Secret parent Limited Brands Inc. also beat expectations.

Still, there is some concern that momentum may not continue heading into the back-to-school shopping season when consumers are likely to find higher prices on everything from clothing to handbags.

Target's total revenue for the five weeks ended July 2 rose nearly 6 percent to $6.26 billion.

The Minneapolis-based retailer expects July revenue in stores open at least one year to rise in the low- to mid-single digits.

For the quarter-to-date, revenue in stores open at least one year rose 3.8 percent while total revenue rose nearly 5 percent to $11.06 billion.