MINNEAPOLIS (AP) — The retailer Target said Thursday a key sales figure rose 7 percent in February as more people came to its stores and spent more on core categories such as food and health care products.
Results were above Target's expectations as well as analysts' estimates. Analysts expected a 5.2 percent rise, according to Fact Set.
The company said it continues to expect revenue in stores open at least one year will rise 4 percent in the first quarter and projects the March figure will rise in the low-to-mid single digits.
This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Target Corp. shares rose 41 cents to $57.10 in premarket trading.
Total sales during the four weeks ended Feb. 26 rose 8 percent to $5.13 billion. Total traffic and average amount spent both rose.
"February sales were well above our expectations, due to stronger-than-expected guest traffic combined with a solid increase in transaction size," said CEO Gregg Steinhafel in a statement.
Food, health care and beauty were the strongest categories. Accessories and apparel performed above average as well.
Target has been facing tough competition and fickle shoppers. In order to improve results, it plans to start opening unique specialty shops-within-shops in May to offer limited edition merchandise, from dog biscuits to platform shoes, as it attempts to further distinguish itself from rivals. The temporary shops will be launched in May. It will also start testing expanded displays of Apple products in 25 stores.
Target has also started offering more food and a 5 percent discount for customers who pay with Target-branded credit and debit cards. The discounts began in late 2010.
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