Target, Costco Comps Below Expectations

MINNEAPOLIS — Target Corp. here and Costco Wholesale Corp. were among retailers that reported weaker than expected same-store sales for June on Thursday.

Target reported same-store sales gains of 2.1% for the five-week period that ended June 30, driven by an increase in transaction size, while traffic was flat relative to the period of year ago. The company said June comps were strongest in food categories, with gains in the low double digits, followed by smaller gains in apparel and declines to home goods and hard lines. All of Target's regions had comp-store gains for the month, with the strongest performance in portions of the Midwest and West and the weakest performance in the South.

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Issaquah, Wash.-based Costco meanwhile posted comp-store gains of 3% overall, below analysts’ estimates and weighed down by unfavorable foreign currency exchange rates. The company said the mid-week timing of the July 4 holiday also had a negative impact on sales for the period, which ended July 1, relative to the period of a year ago.

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Total sales for the month of June were $9.2 billion for the five weeks ended July 1, up 6%. For the 44-week, year-to-date span for the company’s fiscal year, Costco said sales were up 10%, to $80.5 billion.

For June, the U.S. regions with the strongest results were the Midwest, Bay Area and Pacific Northwest. Food and sundries comps rose in the mid-single digits. Food and sundries remained inflationary in the low single-digit range, vs. the year-ago period, Costco said.

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