Easter holiday and a favorable weather well guided Target Corporation (TGT) to post strong sales results for the five-week period ended March 31, 2012.

Target, the operator of general merchandise and food discount stores in the United States, registered an increase of 7.3% in comparable store sales for March 2012, in contrary to a 5.5% decline in the prior-year period. In terms of performance, target exceeded its peer, Costco Wholesale Corporation (COST), which witnessed an increase of 6% in comparable store sales during the period under review.

Management noted that the company’s March sales surpassed its expected growth range, reflecting an increase in average transaction size coupled with a rise in comparable store transactions.

Category wise, comparable store sales were strongest in health care, with food increasing in the mid teens, while household essentials grew in the mid single-digit range. Apparel and accessories marked a low double-digit increase, while hardlines increased in the low single-digit range. Alongside, the company witnessed increased sales in every region.

Minneapolis, Minnesota-based Target Corporation announced that net retail sales for March increased 7.9% to $6,427 million from $5,955 million reported in the prior-year period.

Year-to-date, Target registered a 7.2% increase in comparable store sales with an 8% rise in net retail sales to $11,559 million.

Buoyed by the better-than-expected results, Target has raised its first-quarter 2012 bottom line forecast. The company now expects first quarter earnings to range from $1.04 to $1.10 per share versus its earlier guidance of 97 cents to $1.07. The current Zacks Consensus Estimate for the quarter stands at 97 cents per share.

Going forward, Target expects comparable store sales to increase in low- to mid-single-digit range for April 2012.

Currently, Target holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation. Considering the fundamentals, we have a long-term ‘Neutral’ rating on the stock.

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