Target Slumps After Warning

Updated from 12:31 p.m. EDT

SAN FRANCISCO -- Shares of

Target

(TGT) - Get Report

fell nearly 4% Tuesday, a day after the discount chain lowered its sales forecast for September.

The Minneapolis-based company now expects same-store sales, or sales at stores open at least a year, to increase 1.5% to 2.5% this month, down from its earlier forecast of 4% to 6%.

In a prerecorded message Monday evening, Target cited slowing foot traffic, particularly in the Northeast and Florida, as the reason for its downward revision.

Target's stock was recently off s$2.43, or 3.8%, to $61.87.

Home-improvement goods retailer

Lowe's

(LOW) - Get Report

also warned after the close of softer sales, blaming drought conditions in its mid-Atlantic, southwestern and western regions.

The company expects full-year earnings to be on the low end or slightly below its guidance of $1.97 to $2.01 a share. Analysts surveyed by Thomson Financial had predicted earnings of $1.98. Lowe's shares were down 5.1% to $29.

Both outlooks weighed on the broader sector, and the S&P Retail Index declined 2.8%.

Todd Slater, an analyst for Lazard Capital Markets, noted that

Costco

(COST) - Get Report

has also noticed some weakness recently, reporting only a 1% increase in same-store sales last month, driven by a 4.5% traffic decline in California.

"A slowdown affecting all coasts now appears confirmed, with Target citing issues in

Florida and the Northeast," Slater wrote in a Tuesday note.