A Target for the Bears
Although rival Wal-Mart
At this point, Target investors are unsure of what to make of the stock. Management has not been able to quickly respond. But unless management figures out from where Target's next leg of growth is going to come, this stock may become target practice for the bears for the foreseeable future.
Target has always proven to be an extraordinarily smart company by the way it has been able to appeal to both the frugal shopper and those with an appetite for the "upscale high-end" category. This model has benefited the company while Target still held true to its strategy of offering great products at discounted prices.
It seems, however, that this advantage is now slowly evaporating as there wasn't much to like in the company's recent earnings report. Sales were up half of 1% to $16.6 billion. As with other large retail chains such as Lowe's
Interestingly, rival Home Depot
Comps, or same-store-sales, is the metric that tracks the sales performance of stores that have been opened at least one year. Target posted a 60-basis-point decline in that category. It's not a great number. But I'm willing to give management credit here for outperforming Wal-Mart, which posted 1.4% decline.