Target in sellers' crosshairs after fourth quarter earnings, poor guidance
Shares in Target careened lower after the company missed analysts' fourth quarter profit forecasts, while offering up worse-than-expected guidance.
Target Corp.
$163.13
10:59 10/05/24
The discount retailer said earnings for the quarter to 28 January dropped from $1.43bn one year ago to $817.0m or from $2.32 a share to $1.56.
"Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores," said Target's chief Brian Cornell.
Excluding the impact of extraordinary items, the Minneapolis-based company said earnings per share for the quarter printed at $1.45 (consensus: $1.51) as the top line shrank 4.3% to $20.69bn (consensus: $20.70bn).
Like-for-like sales over the latest three-month span decreased by 1.5% (consensus: -1.4%).
The company's outlook provided little room for comfort, with management saying fiscal 2017 first quarter EPS would be $0.80 to $1.0 (consensus: $1.33).
For all of 2017, its performance on the bottom line would be little better, at between $3.80 to $4.20 (consensus: $5.32).
To remedy the situation, Cornell said Target would launch 12 new brands to re-position the firm for sustained growth, although that, he added, might prove a headwind to sales and profit growth.
As of 1232 GMT shares in Target were declining 12.78% to $58.36 near their worst levels of the past two-and-a half years and their third largest percentage point drop ever.