Target has ended its streak of sales declines in the second quarter, largely thanks to its more pronounced focus on providing value for consumers, according to an analyst.

The company’s sales rose 2.6 per cent year-on-year to $25 billion, and comparable sales were also up 2 per cent. However, the growth came off the back of a very soft prior year, and the retailer’s revenue remains down by 2.5 per cent over the same period in 2022. 

Target is now headed in the right direction, but still has much more to do to get back into the winners’ enclosure, said GlobalData MD Neil Saunders.

One of the main factors that supported the sales growth was the company’s more pronounced focus on value, Saunders continued. The Target Circle Week stimulated a lot of interest among shoppers, and there has been more discounting across select categories, including more sluggish segments like homewares. 

“Target’s retooling of its value position is a sensible response to the current environment, and it should continue to deliver results across the quarters ahead,” he said.

On the bottom line, operating income increased 36.6 per cent, and net earnings jumped 42.7 per cent to $1.2 billion.

According to Saunders, Target’s results come as a relief for the retail economy, proving that while consumers remain constrained and cautious they are not in recession mode.

“This should give the business confidence and space to get back to its innovative roots, including launching new, and revitalizing existing, private label brands,” he added.

For the full year, the company expects comparable sales to be flat or up 2 per cent. Saunder believes this reflects a “very changeable” consumer sentiment, which is being increasingly driven by banner events and occasions.