Target posts second quarter sales decline

Image source: Target

Target (NYSE:TGT) posted a sales decline for the second quarter and lowered expectations for the remainder of the year, citing a challenging retail environment.

"While we recognize there are opportunities in the business, and are addressing the challenges we are facing in a difficult retail environment, we are pleased that our team delivered second quarter profitability above our expectations," said CEO Brian Cornell. "Looking ahead, we remain focused on our enterprise priorities as we continue to see the benefits of investing in Signature Categories, store experience, new flex-format stores and digital capabilities. Although we are planning for a challenging environment in the back half of the year, we believe we have the right strategy to restore traffic and sales growth over time."

Comp-store sales fell 1.1 percent, although comp-store sales in signature categories outpaced the total by roughly 3 percentage points.

The home category grew nearly 4 percent, led by strength in domestics, decor and seasonal areas. Highlights included the kids home assortment which saw comp sales in the mid-teens, driven by the launch of Target's new Pillowfort brand.

Apparel also saw strong sales for women, baby and kids. The category was up between 2 and 3 percent for the quarter and up more than 16 percent from two years ago, when Cornell joined Target and embarked on a campaign to reinvigorate the category.

But Target still struggles with food and hardlines.

Target will continue to invest in store remodels and new merchandising as seen in its LA 25 stores. There will be an emphasis on hyper-localized assortments, more self-checkout lanes and order pick-up locations.

There will also be a $20 million investment in adding single stall bathrooms with doors that lock, in a nod to those customers uncomfortable with the company's inclusive policies.

For more:
- see this Target financial release
- see this Target transcript at Seeking Alpha