Unlike several other retailers, Target (NYSE: TGT ) wasn't phased by the bitter weather in February. Either that, or customers at the upscale discount retailer are just a bit tougher than the competition. For the month, the company reported an increase in comps of 5.7%, near the high end of its guidance and ahead of estimates.
The perfect combination of increased customers and higher average receipts pushed sales higher. In a sign of strength, Target is attracting more shoppers, and those shoppers are spending more money in its stores. Contrast that with Wal-Mart (NYSE: WMT ) , which posted a minimal gain in comps as it reported fewer consumers spending a bit more per receipt.
Although it's getting skimpy results from its changes in its intimates section, Target got better feedback in its attempts to sell more food products. In addition to its consumables, Target's gains were led by its health-care, baby, and electronics divisions. Following the lead of intimates, its music, movies, and garden sections were the laggards. You really have to love that mix of products, though.
Looking ahead, Target expects to grow even faster in March. The company projects same-store sales to increase 11% to 13%. Target should benefit from the earlier arrival of Easter this year, plus the fact that it will be up against a rather weak 2.2% gain from last March.
Target has earned the distinction of trendy pick among the discount retailers, as demonstrated by its sales growth. Unfortunately for those who don't already own it, its stock price has been just as strong and is trading near all-time highs. Its steep climb over the past few months makes me wary of purchasing today, but I will be on the lookout for any dips.
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At the time of publication, Fool contributor Mike Cianciolo owned shares of Wal-Mart, but no other company in this article.
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