Target shopping carts a shows outside a newly constructed Target store in San Diego, California May 17, 2016. REUTERS/Mike Blake
November 15, 2017
(Reuters) – Target Corp <TGT.N> issued an underwhelming profit forecast for the key holiday quarter, as it continues to depend on price cuts to drive traffic to its stores and websites, sending its shares down 3 percent in premarket trade.
The department store operator forecast adjusted earnings of $1.05 to $1.25 per share for the quarter ending January 2018, largely below the average analyst estimate of $1.24.
The company’s same store sales in the third quarter, however, topped estimates, driven by online sales.
Sales at the retailer’s stores open at least a year increased 0.9 percent, above the average analyst estimate of 0.4 percent, according to Thomson Reuters I/B/E/S.
Comparable online sales jumped 24 percent and contributed 0.8 percentage points to Target’s total comparable sales growth.
Net income fell to $480 million, or 88 cents per share, in the third quarter ended Oct. 28, from $608 million, or $1.06 per share, a year earlier, on higher selling and general expenses.
Excluding items, the company earned a profit of 91 cents per share, beating the average analyst estimate of 86 cents.
Sales rose 1.4 percent to $16.67 billion.
(Reporting by Sruthi Ramakrishnan in Bengaluru and Richa Naidu in Chicago; Editing by Saumyadeb Chakrabarty)