Shares of retail giant Target Corp. were in the red on Wednesday after reporting a first quarter profit that trailed behind what analysts had been looking for.
The company’s CEO Brian Cornell said during the earnings call that comparable store sales saw an increase, even higher than what analysts had been expecting, but operating income continues to “reflect near-term challenges.”
Operating income margin went from 7.1% in the year ago quarter to 6.2% this quarter.
Analysts at Morningstar wrote, “The key message from Target’s first-quarter results was the company’s ability to drive transaction growth, but not without investment spending and margin pressures.”
Target recently waived its next-day delivery fee for household essentials from $2.99 to $4.99 for guests who use their Target card. It also announced that it will be launching a new drive-up service where shoppers can pick up orders in an hour.
For the full year, Target is expecting a low to single digit increase in comparable sales and adjusted earnings in the range of $5.15 to $5.45 a share.
Disclaimer: We have no position in Target Corporation (NYSE: TGT) and have not been compensated for this article.