Shares of discount retail giant Target (TGT) - Get Report fell on Wednesday after the company said sales of toys, electronics and home furnishings over the critical holiday shopping season weren’t as strong as expected, and warned that overall growth for its fiscal fourth quarter will likely be lower than predicted.
Target reported that sales rose 1.4% between Nov. 1 and Dec. 31 in stores and through its digital channels, below its own forecasts, and warned that growth for the full quarter, which includes January, will likely come in less than half the 3% to 4% growth it had been expecting.
The Minneapolis-based company pointed to weak sales of toys and electronics – two key holiday-season categories that all retailers count on to boost sales. Still, it said it was maintaining its profit targets, in part because other categories that did have robust sales earn higher margins.
For the fourth quarter, Target is still expecting adjusted per-share earnings of $1.54 to $1.74 and full-year adjusted per-share earnings of $6.25 to $6.45.
Investors and analysts took Target’s miss on its own numbers as a sign that it may not have been the blockbuster holiday shopping season retailers were expecting.
Indeed, despite a condensed calendar shopping period and initial expectations of a strong post-Thanksgiving shopping season kick-off, Target and other retailers including Kohl’s (KSS) - Get Report also have reported sluggish holiday sales.
Shares of Target were down 6.22% at $117.43 in morning trading on Wednesday. Shares of Walmart were down in sympathy, dropping 0.98% to $115.03.