Target Issues Profit Warning on Disappointing Holiday Sales

By Anne Steele 

Target Corp. posted softer-than-expected comparable sales during the holiday season and cut its guidance for the fourth quarter and year, the latest retailer to post a disappointing end to 2016.

During the November and December period, same-store sales fell 1.3%.

"While we were pleased with Black Friday sales, December digital sales growth of more than 40% and continued strength in our signature categories, these results were offset by early season sales softness and disappointing traffic and sales trends in our stores," said Chief Executive Brian Cornell.

Target's stock fell 4.8% premarket to $67.52.

Total sales declined 4.9%, hurt by comparisons to a year-earlier period that included revenue from Target's pharmacy and clinic businesses, which it sold in December 2015.

Target now anticipates fourth-quarter comparable sales to decline between 1% and 1.5%, compared with prior guidance of between down 1% and up 1%. Adjusted earnings are expected between $1.45 and $1.55 a share, compared with prior guidance of $1.55 to $1.75 a share.

For 2016, Target now expects to report adjusted earnings of $5 to $5.10 a share, compared with prior guidance of $5.10 to $5.30 a share, reflecting 44 cents a share of early debt-retirement losses and a 1-cent per-share benefit from the resolution of income tax matters.

The company is slated to release its full fourth-quarter results Feb. 28.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

January 18, 2017 07:48 ET (12:48 GMT)

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