- Target shares dropped sharply in premarket trade as third-quarter earnings missed Wall Street estimates.
- The retailer cut its full-year financial guidance and reported sales growth of just 0.3%.
- CEO Brian Cornell said the retailer faces "unique challenges and cost pressures."
Target shares plunged as much as 18% in premarket trading after the retailer posted disappointing third-quarter earnings and lowered its financial guidance for the year.
On Wednesday, Target reported adjusted earnings per share of $1.85, down just under 12% year-over-year. Analysts had expected earnings per share of around $2.30.
Alongside lower-than-expected EPS, Target's profit fell 12.1%, down to $854 million compared to $971 million in the third quarter of 2023.
Revenue was also lower than expected at $25.7 billion, compared to Wall Street forecasts of $25.9 billion. It grew 1.1% compared to the same period in 2023.
"We encountered some unique challenges and cost pressures that impacted our bottom-line performance," Brian Cornell, chair and CEO of Target Corporation, said in the earnings release.
In the release, Target also cut its full-year financial guidance, saying it expects earnings per share of between $8.30 and $8.90. At its second-quarter earnings in August, the retailer said it expected full-year EPS of between $9 and $9.70.
Target has struggled to boost discretionary sales as consumers across the country are spending less money on non-essential items.
The firm reported a minimal increase in comparable sales this quarter of 0.3% year-over-year. Store sales declined 1.9%.
However, a 10.8% boost in digital sales helped to deliver the slow rise in overall sales, which was partially driven by Target Circle 360, the company's loyalty program.
Before Wednesday's open, Target's share price was up around 9% in 2024, lagging far behind similar retailers like Walmart and Costco, which have risen 63% and 43%, respectively.