AddThis

Forecast calls for caution

For all of the things that Target seems to have going right heading into the holiday season, the company’s official forecast of low single-digit November same-store sales seems remarkably mild. In the plus column there is the launch of the 5% Rewards loyalty program, a meaningful number (400+) stores in the PFresh format, reduced delinquency rates in the credit portfolio, favorable customer traffic trends, easy comparisons against last November when comps declined 1.5% and the expectation that cooler-than-normal November weather will make it feel like Christmas and provide a spark to seasonal sales.

All that stuff sounds pretty good, right? Of course, it is offset to a degree by the weak economy, high unemployment and intense competition for consumers’ dollars. Still, on balance forecasting a low single-digit comp increase with all Target has going for it seems to be a major-league sandbagging effort to lower the investment community’s expectations or a case of chairman, president and CEO Gregg Steinhafel exercising a good deal of restraint after a challenging October. Nothing wrong with either of those strategies, especially given the October comp of 1.7% was at the low end of the company’s guidance after a modest decline the prior year.

© 2014 Retailing Today. All Rights Reserved.