Target's sales weak, but expected

MINNEAPOLIS Target’s January same-store sales results declined 3.3%, but at least the company can take comfort in the fact that it accurately forecasted and communicated the decline to investors. Total sales for the four-week period ended Jan. 31, increased slightly less than 1% to $4.1 billion, with the major pressure on sales coming from a reduction in customer traffic.

“January sales were in line with our planed range for the month,” said Target chairman, president and CEO Gregg Steinhafel.

Even so, because Target is selling more low-margin food and consumable products, has increased bad debt reserves, experienced holiday season markdown pressure and last week incurred more expenses associated with a major work force reduction, the company said its fourth quarter earnings would be les than consensus analysts’ estimate of 86 cents.

For the month of February, Target said it expect same-store sales to decline in the mid-single digits, but given the uncertainty in the market, a wide range of outcomes around that figure are possible.