NEW YORK (
(TGT - Get Report)
ticked lower Wednesday after the discount retailer reported disappointing earnings results and lowered its full-year guidance.
Shares were dropping 3.3% at the open to $68.90.
The Minneapolis-based company reported first-quarter profit of $498 million, or 77 cents per share. Revenue, which includes its U.S. and Canadian-based operations, fell 1% to $16.7 billion. Analysts were expecting 87 cents a share on revenue of $16.8 billion.
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Target's adjusted earnings per share, a measure the company believes is useful in providing period-to-period comparisons of the results of its U.S. operations, were $1.05 in first quarter 2013, down 5% from $1.11 in the first quarter of 2012.
U.S. sales, the majority of the company's operations, nudged 0.5% higher to $16.6 billion from the same period last year, which reflected a 0.6% decline in comparable-store sales combined with the contribution from new stores, the company said.
Target had previously warned on April 16 first-quarter comparable store sales would be flat, particularly from lower sales of seasonal and weather-sensitive products.
It also said that the quarter's adjusted EPS would be below its previous forecast of $1.10-$1.20 per share. (GAAP earnings would also be 28 cents lower than adjusted EPS due a variety of things including the early retirement of debt and gains from the sale of its credit card portfolio to
(TD - Get Report)
, it said.)
Shares were falling 2.3% to $69.66 in pre-market trading.
"Target's first quarter earnings were below expectations as a result of softer-than-expected sales, particularly in apparel and other seasonal and weather-sensitive categories," Target's chairman, president and CEO Gregg Steinhafel said in the earnings release. "While we are disappointed in our first-quarter performance, we remain confident in our strategy, and we continue to invest in initiatives, including Canada, our digital channels and CityTarget, that will drive Target's long-term growth."
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Target forecast that adjusted earnings per share in the second quarter will be between $1.09 and $1.19; GAAP EPS is expected to be 90 cents a share to $1 a share