Target’s August sales top expectations

MINNEAPOLIS — Target Corp. reported sales results at established stores in August that surpassed Wall Street projections, as the discounter benefits from improved merchandise assortments and its emphasis on low prices.

The Minneapolis-based discounter said Thursday that sales at stores open at least a year dipped 2.9 percent. Analysts surveyed by Thomson Reuters predicted a bigger sales decline of 5.1 percent.

Sales at stores open at least a year are a key indicator of retailer performance because they measure growth at existing stores rather than newly opened ones

Total sales for the period ended Aug. 29 edged up 0.1 percent to $4.86 billion.

Monthly traffic was flat, marking a “meaningful improvement from second quarter trends,” the discount chain said.

Discounters, particularly Wal-Mart Stores Inc., have benefited from consumers switching to cheaper stores and focusing on necessities. But at Target, where more than 40 percent of revenue comes from nonessentials like funky jeans and bedspreads, the cheap-chic formula that once was its strength has became a drag as shoppers focus on basics. That has forced the discounter to further expand into the food business as a way to drive shoppers into the store more frequently.

Target is also focused on several other initiatives to bring customers in the door. The discounter has expanded its “low-price” promise in advertising in all stores, matching competitors’ local advertised prices on identical items.

It also relaunched its store-label Target Brand as Up & Up; it spans 40 categories like health and beauty, and company officials said last month that it’s having a good initial response.

For the year to date, sales at store open at least a year fell 4.7 percent, and total sales dropped 1 percent to $33.78 billion.

Target currently runs 1,719 of its stores in 49 states.