Target Dims Outlook as Sales Struggle
17 August 2016 - 9:40PM
Dow Jones News
Target Corp. said sales at existing stores fell for the first
time in more than two years and signaled conditions would remain
challenging during the remainder of the year.
The company cut its view for the full year, now forecasting
$4.80 to $5.20 in adjusted earnings per share, after saying in May
that its original target of $5.20 to $5.40 was still achievable
despite weakness in the first half. For the year, Target expects
same-store sales to be flat to down 2%.
For the current quarter ending in September, Target expects to
earn an adjusted 75 cents to 95 cents a share, compared with the 95
cents analysts have expected.
"Based on the current retail environment, the company believes
it is prudent to lower its expectations for comparable sales in the
second half of the year," Target said Wednesday. "Although we are
planning for a challenging environment in the back half of the
year, we believe we have the right strategy to restore traffic and
sales growth over time," said Chief Executive Brian Cornell.
During the quarter, sales at existing stores fell 1.1%. Target
had warned that sales at stores open at least a year could drop 2%
during the quarter, in part because of a dwindling store traffic.
Analysts had predicted a 0.9% decline. The fall is the first since
April 2014 and worst since the start of 2014.
The retailer isn't alone in reporting softer sales on fewer
visits. Apparel giant Macy's last week said it would shut 100 more
stores, or 14% of its physical base, as shoppers increasingly opt
to make purchases online and spend more on services than on goods.
Wal-Mart Stores Inc., meanwhile, reached an agreement to buy web
retailer Jet.com Inc. for $3.3 billion.
For Target, digital sales continued to slow during the period,
rising 16% versus 23% in the first quarter and just about half the
pace logged a year earlier.
In all for the quarter, Target reported a profit of $680
million, or $1.17 a share, down from $753 million, or $1.18 a
share, a year earlier. Excluding a loss stemming from early
retirement of debt, among other items, per-share profit rose to
$1.23 from $1.22.
Revenue slid 7.2% to $16.17 billion.
Analysts projected $1.12 in adjusted earnings per share on
$16.18 billion in sales, according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
August 17, 2016 07:25 ET (11:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Macys (NYSE:M)
Historical Stock Chart
From Apr 2024 to May 2024
Macys (NYSE:M)
Historical Stock Chart
From May 2023 to May 2024