Target Corp. said sales at existing stores fell for the first time in more than two years and warned of further weakness, signs that Chief Executive Brian Cornell’s turnaround push has stalled.
The retailer cut its view for the full year, now forecasting $4.80 to $5.20 in adjusted earnings per share, after saying in May that its original target of $5.20 to $5.40 was still achievable despite weakness in the first half. For the year, Target expects same-store sales to be flat to down 2%.
For the current quarter ending in September, Target expects to earn an adjusted 75 cents to 95 cents a share, compared with the 95 cents analysts have expected.
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Shares of the company fell 5.6% to $71.24 in premarket trading.
“Based on the current retail environment, the company believes it is prudent to lower its expectations for comparable sales in the second half of the year,” Target said Wednesday. “Although we are planning for a challenging environment in the back half of the year, we believe we have the right strategy to restore traffic and sales growth over time,” Mr. Cornell said.
During the quarter, sales at existing stores fell 1.1%. Target had warned that sales at stores open at least a year could drop 2% during the quarter, in part because of a dwindling store traffic. Analysts had predicted a 0.9% decline, and a year earlier, same-store sales climbed 2.4%. The fall is the first since April 2014 and worst since the start of 2014.
Mr. Cornell took over as CEO in 2014 and has been working to reinvigorate sales by focusing on higher-margin categories, shuffling management and embarking on cost cuts. But the company’s second-quarter report and outlook for the year suggests his turnaround efforts are running out of steam as retailers across the spectrum contend with falling foot traffic and American consumers who are changing what they buy and where they buy it. For Target, an extra source of weakness is its grocery segment, which represents a fifth of sales and is an area where the company has focused on freshening up its aisles.
Target “continues to be impacted by challenged consumers across multiple income demographics, as well as a food business that still needs to gain traction,” said Charlie O’Shea, analyst at Moody’s Investors Service. The guidance cut reflects that “back-to-school, college and holiday selling seasons may not provide [a] meaningful sales lift,” and both seasons are likely to be highly promotional, he said.
http://www.wsj.com/articles/target-dims-outlook-as-sales-struggle-1471431793
Target seems to be blaming consumers who it says are 'challenged'. Nowhere is there any word about management practices which could be impacting sales, such as the decision in April 19 to drive away customers with transgender policies.
Since April, Target has lost billions in value for its shareholders. Compared to its main competitor Walmart, it is losing customers and business
My daughter in law with my three grand-daughters was hesitant to go to Target following its announcement of its new bathroom policy, but went anyway because it had a family restroom that did not have to be shared with men. While shopping, she took the kids to the family restroom only to find it locked. When she asked the Target employee why it was locked, she was told that it was reserved for Target employees only. She will never return to Target again.
This behavior sounds like the liberal elite who make walls to protect themselves while keeping our borders open and keep themselves safe with armed guards but wish to disarm us.
No wonder the company is going into the toilet.
