Target cuts full-year forecast after weak first quarter
By Jessica Wohl
(Reuters) - Target Corp (TGT.N: Quote) cut its full-year profit forecast on Wednesday while turning in a weak first quarter with disappointing sales, as a chilly start to spring kept shoppers from buying seasonal items like clothing.
Target warned in April its first-quarter results would be weaker than anticipated, and its performance was even worse than revised Wall Street expectations due to the cool weather and the impact of higher payroll taxes on spending.
Shares of Target fell 3.6 percent to $68.70.
First-quarter sales at stores open at least a year fell 0.6 percent, while analysts targeted a 0.03 percent decline, according to Thomson Reuters I/B/E/S. Back in April, Target forecast same-store sales would be about flat versus its previous outlook of flat to up 2 percent.
"This is Target's weakest quarterly same-store sales performance since the Great Recession year of 2009," said Sandy Skrovan, U.S. research director at Planet Retail.
The last time Target's quarterly same-store sales fell was in the third quarter of 2009, when it posted a decline of 1.6 percent.
This year, shoppers held off buying spring merchandise such as clothing, fans and garden supplies as a chilly start to the season left them little reason to splurge.
"Across the board things were disappointing for a lot of retailers," Skrovan said. Continued...