I have been studying the Lutheran tradition for some time now, that doesn't by any means make me an expert, so I may be able to answer your question. Some prelimanary points on their confessions are in order first. Conservetave Lutherans hold to what is known as the
Book of Concord, this contains the following documents:
1. Three Cheif Symbols or Euchumenical Creeds (Apostles Creed, Niciane Creed, Athanasias Creed).
2 Augsburg Confession, in both a Latin and a German version (written by Philip Melancthon).
3. Apology for the Augsburg Confession (written by Philip Melancthon).
4. The Smalcald Articles (written by Luther).
5. Treatise on the Power and Primacy of the Pope (written by Philip Melancthon).
6. The Small Catechism (written by Luther).
7. The Large Catechism (written by Luther).
8. Formula of Concord (written by several Lutheran Theologians to unify their Churches, in 1577).
I say all this to show that there is more to Lutheranism than just the Augsburg Confession, so if we isolate that document to be critical of their position than we are leaving a lot out. I believe it is only ethical that if we are going to be critical of someone's P.O.V. than we ought to understand it as they understand themselves.
So I recomend seeing what the other parts of their conffesions have to say on this matter; the Apology, the Catachisms, and the Smalcald Articles.
The Augsberg Conffesion has this to say:
XIII: The Use of The Sacraments
It is taught among us that the Sacraments were instituted not only to be sighns by which people might be indentified outwardly as Christians, but that they are sighns and testimonies of God's will toward us for the purpose of awakening and strenghthening our faith. For this reason they require faith, and they are rightly used when they are recieved in faith and for the purpose of strenghtaning faith
This section rules out Baptism as a "work", Lutherans maintain a strict divide between Law and Gospel. The basic fundamental difference between Lutherans and the Reformed view, as I understand them, is this:
1. Lutherans believe that all partakers of the Sacraments recieve something; but faith, which they understand as a gift from God, is what makes it benificial. Without faith it is only damning.
2. The Reformed view is that only the elect recieve anything in the Sacraments through faith, which is also a gift from God.
This is by no means a exact explination of either view, but I think it gets the point across. Also I do not believe the Lutheran view to be completly accurate, I believe the Reformed Conffessions to teach a more complete view on the matter. I hope this helps.