The Minneapolis-based retailer said it expects sales at stores open for at least a year to decline in the low-single digit percentage range in 2017, after reporting a fall of 0.5% in 2016.
Consensus estimates were expecting the company’s same-store sales to increase 0.4% this year.
Target also forecast full-year earnings from continuing operations of US$3.80-US$4.20 per share, while analysts’ on average were expecting them to top US$5.00.
Target’s chief executive Brian Cornell, said : “Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores.”
The retailer’s results compare poorly against those of bigger rival Wal-Mart Stores Inc (NYSE:WMY), which last week reported higher-than-expected US sales for the fourth quarter as its low prices attracted more customers to its stores and online activity accelerated.
Quarterly drop …
Target’s net income dropped to US$817mln, or US$1.45 per share in the three months to January 28, down from US$1.43bn, or US$2.32 per share a year earlier.
Same-store sales in the quarter fell 1.5%, missing analysts forecasts of a 1.3% decline.
The retailer also reported a decline in gross margins to 26.9% from 27.9%.
In early New York trading, Target shares plunged 14% to US$57.49, having already fallen by around 6% since the group warned on its fourth-quarter results in January.
Story by ProactiveInvestors