Kmart has continued to shine throughout the third quarter of the 2014 financial year, while its sister brand struggles to find its footing.
Parent company Wesfarmers has released its retail sales results for the third quarter of the 2014 financial year, with Kmart pinned as one of the strongest performers in its stable.
The retailer achieved total sales of $845 million for the quarter – 0.4 per cent above the previous corresponding period – with comparable store sales increasing 0.7 per cent.
Adjusting for the effect of the earlier Easter timing in the previous corresponding period, comparable store sales increased 1.9 per cent during the quarter.
The quarter represented the 17th consecutive quarter of growth in transactions and units sold.
Kmart managing director Guy Russo said sales performance for the quarter was pleasing, with growth driven by seasonal apparel and core ranges within home categories.
Sister brand Target, however, has continued to suffer from the effects of its ongoing restructure.
Wesfarmers managing director Richard Goyder said Target recorded lower sales due mainly to difficult trading early in the period as the business “continued to reposition its offer towards less promotional dependence with a view to securing long-term, sustainable growth”.
Overall, Target recorded total sales of $674 million for the quarter – 3.6 per cent below the previous corresponding period, with comparable store sales decreasing 5.9 per cent.
Adjusting for the effect of the earlier Easter timing in the previous corresponding period, comparable store sales decreased 4.7 per cent during the quarter.
Commenting on the results, Target managing director Stuart Machin said the sales performance during the quarter reflects the transformation underway within the business.
“During the quarter we continued to lower our prices and reduce our reliance on over-ordering and over-promoting, consistent with our ‘first price, right price’ strategy. Sales were, however, affected during the quarter as we rebuild trust with our customers who have come to expect high levels of discounting from Target.
“After a disappointing sales performance in January and February, particularly in our hard goods departments, trading in March was more encouraging with lower prices offset by transaction growth. Stronger sales were achieved in departments where better fashion, style, quality and lower everyday prices have been introduced.
“There remains significant opportunity to improve our sourcing, although a continued focus on inventory has resulted in an improved seasonal mix,” Machin said.