Target Updates: Reports Strong February Sales

Last week, Target (NYSE:TGT) reported $5.13 billion in sales for the month of February, representing an impressive 8% increase yoy. Target CEO Gregg Steinhafel attributed stronger-than-expected guest traffic and a solid increase in transaction size for the strong sales growth. ^[1] He also asserted that Target is working toward a Q1 comparable store sales increase of around 4%.

In another announcement, Target plans to complete remodels at more than 100 general merchandise stores. Beginning March 25, these stores will be fully operational and will offer a wide selection of fresh foods to customers. This is the first phase of remodels for Target this year. ^[2]

According to reports, Target is presently working with other retailers including Wal-Mart (NYSE:WMT) to develop a more advanced mobile payment system, along the lines of Google Wallet and ISIS. This technology enables users to make secure payments by simply tapping the phone on any Pay-Pass-enabled terminal at checkout. Target asserted that it is exploring potential solutions to deliver the fastest and most secure mobile-payment experience possible for its customers. ((See: Walmart, Target to Compete with Isis, Google Wallet, WebProNews))

We believe this new technology has a huge growth potential within the mobile payments industry. Target could leverage its customer network, wide reach and existing business model to increase adoption rates for this future mobile payments platform. Target’s stock price did not show much volatility in the past week, witnessing a marginal increase of 1% since its monthly sales release.

See our complete analysis for Target here

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1. See: Target Reports February Sales Results, 4-Traders [↩]
2. See: Target Completes More Than 100 Store Remodels in March to Expand Fresh Food Selection, Company Website [↩]