Target Slumps After Warning
Updated from 12:31 p.m. EDT
SAN FRANCISCO -- Shares of
Target
(TGT) - Get Target Corporation 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
TheStreet Recommends
(LOW) - Get Lowe's Companies Inc. 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 Costco Wholesale Corporation 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.
