April expectations appear high

April sales are due out later this week, and, given steady improvements in Target’s financial results this year, it could be tough for the company to exceed escalating expectations regarding its performance. Same-store sales are officially forecast to decline in the range of low- to mid-single digits following a strong performance in March when a 10.3% increase was impacted by the early arrival of Easter, which caused virtually all seasonal sales related to the holiday to fall in March. However, it would appear investors are clearly anticipating good things from Target, as the company’s share price since the March results were released has trended upward and last week hit a 52-week high of $58.52.

Simply achieving planned results would surely be viewed as a disappointment by the market, and there were several wild cards in play during April that will influence results. For example, Target presented shoppers with an array of newness in the form of merchandising exclusives (Giada De Laurentiis, Eugenia Kim, Cynthia Vincent, Miss Jessie’s, Caldrea Essentials), and the risk is the company moved further and faster than shoppers are ready for resulting in weak demand. Another variable is whether Target was able to maintain momentum in customer traffic in the face of a massive promotional blitz undertaken by Walmart mid month when it launched a broad-based marketing campaign to support a price rollback initiative.