Shares of Target slid 10% on Wednesday after the company issued a holiday-quarter profit forecast that was less than what Wall Street was expecting.
This is now the second year that the retailer has missed profit expectations for the fourth quarter.
The company has forecast adjusted earnings of $1.05 to $1.25 a share. Analysts had been expecting $1.24 on average.
Not too long ago Target announced that it would be hiring 100,000 temporary workers for the holidays.
Managing director of GlobalData Retail, Neil Saunders commented, “It was always unrealistic that Target was going to have a great holiday season in terms of sales or profitability.”
“This is still a very competitive environment, and Target has no choice but to respond to that.. the problem is that Wall Street don’t necessarily understand this,” he added.
For the third quarter, Target revealed a profit of 91 cents per share. Analysts had been waiting for 86 cents.
Sales hit $16.67 billion, also topping estimates of $16.61 billion. Same-store sales beat expectations with a 0.9% rise. Wall Street was only expecting 0.4%.
Disclaimer: We have no position in Target Corporation (NYSE: TGT) and have not been compensated for this article.