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Q4 profits better than expected


The 1.8% same-store sales gain Target generated during December was a noteworthy accomplishment for the company, as it exceeded guidance issued the prior month, which anticipated a slight decline.

“December comparable-store sales were much better than expected, as stronger-than anticipated guest traffic throughout the month drove sales growth in a broad array of merchandise categories, including apparel, electronics, toys, food, and health and beauty,” said Gregg Steinhafel, Target chairman, president and CEO. “These sales results underscore our guests’ continued confidence in Target’s strategy and position us to generate stronger-than-expected fourth quarter profit in our retail segment.”

Not to take anything away from the company’s financial accomplishment, but it is fair to question whether Target’s results stemmed from anything specific it did or were simply a matter of the rising tide of holiday sales lifting all boats. It’s also reasonable to question whether Target even got its fair share of the seasonal growth when looking at the performance of some others. Value player TJX had a phenomenal December with same-store sales that increased 14% on top of flat December 2008. Ross Stores also was in double digits with a 12% gain in December. Even the long suffering Kmart posted a 5.3% gain and Toys“R”Us came in with a 4.6% gain.

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