Target reported disappointing earnings that fell far below Wall Street’s expectations, attributing the results to slower than expected demand. The company announced profits that were 20% lower than forecasts, the widest miss in two years, and revenues also came in below expectations for the first time in over a year. Despite heavily promoting discounts and pushing up holiday sales, Target was unable to meet its sales targets.
The company’s CEO blamed the poor quarter on a slowdown in discretionary spending and costs related to preparing for the port strike in October. Target’s Chief Operating Officer expressed disappointment over the deceleration in demand and cost pressures, leading to a downward revision of profit and sales goals for the year. Despite feeling confident in the long-term outlook, Target’s shares dropped 15% in premarket trading following the news.
The disappointing results from Target come amid signs of softer holiday sales, including slower holiday hiring and caution from Walmart about customer spending habits. While Walmart reported better-than-expected earnings, the company noted that customers were still seeking compelling deals, particularly as food prices have risen. Target’s performance, along with the caution from Walmart, could signal a weaker final calendar quarter than initially expected for retailers.
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