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Target Slides 6% on Disappointing Holiday Sales
On Wednesday, shares of Target Corp. (TGT - Free Report) are sliding, down around 6% in afternoon trading after the retailer reported disappointing sales during the recent holiday season.
Target said that comparable sales fell 1.3% in November and December; any gains seen in its online business were outshone by increased difficulty in getting customers into its stores, a common problem among brick-and-mortar retailers, as well as stiff price competition from Walmart (WMT - Free Report) , Amazon (AMZN - Free Report) , and Best Buy (BBY - Free Report) .
"While we significantly outpaced the industry's digital performance, the costs associated with the accelerated mix shift between our stores and digital channels and a highly promotional competitive environment had a negative impact on our fourth quarter margins and earnings per share,” Target CEO Brian Cornell said in a statement.
Going into the holiday season, Target was facing many challenges. Its digital and marketing chiefs had both recently left the company, while Mark Tritton, chief merchant, was overseeing his first holiday season with the company. Plus, its pharmacy deal with CVS Health (CVS - Free Report) and its grocery business have negatively affected store traffic.
As a result, Target now expects Q4 comparable sales to decrease between 1% and 1.5%, compared with previous expectations of a decline in the range of down 1% and up 1%. Adjusted earnings are estimated between $1.45 per share, down from the prior guidance of $1.55 to $1.75 per share.
For more information on other retailers’ holiday performance, check out the Zacks article “Is 2017 the Year of the Retail Famine?”
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