Shares in Target
What you need to know
For the quarter, Target reported net earnings of $704 million, or $1.06 per share. Excluding one-time gains and losses, this equated to $1.12 per share, a 4.6% increase from the year-ago period.
Most promising was the retailer's top-line figure, which came in at $16.78 billion compared to an average consensus estimate of $16.75 billion. It also represented a 3.3% increase over the second quarter of 2011.
Same-store sales for the quarter, an important metric in the retail industry, increased 3.1%. Its credit card division reported a 5% decrease in revenue due to a lower interest rate spread and higher charge-offs.
Target's chairman and chief executive officer, Gregg Steinhafel, said, "We're pleased with Target's strong second quarter financial performance, which reflects a continued focus on delivering an outstanding experience for our guests and disciplined execution of our strategy."
A look at other retailers
Target's results are largely consistent with the larger retail picture.
Earlier this week, the U.S. Department of Commerce released its monthly retail sales report for July. While analysts had predicted another month of measly sales, the sector surprised many by rising 0.8%. Despite the rise, fellow Fool Justin Loiseau cautions: "July's retail sales report comes as a relief to a market and economy plagued with bad news, but take heed, ye of macroeconomic faith: Macro trends are no replacement for careful company analysis."
Looking at another retailer for more context, shares in Home Depot
The market also reacted warmly to Macy's
The most notable exception to this trend is J.C. Penney
Foolish bottom line
While many writers and analysts are interpreting rising second-quarter retail sales as a sign the economic recovery has gained traction, it'd be wise to withhold final judgment until more substantial figures emerge. For the time being, in turn, I'd urge you to learn which stock our analysts have called "The Motley Fool's Top Stock for 2012." To give you a hint... it's a retail company that dominates the southern hemisphere and has seen its share price increase by over 215% in the last five years alone. To download this free report instantly, click here now.
Fool contributor John Maxfield does not own shares of any company mentioned above. Motley Fool newsletter services have recommended buying shares of Home Depot. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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