Target cuts forecast as it woos back customers with more discounts
By Siddharth Cavale
(Reuters) - Target Corp cut its full-year earnings forecast as it offers more discounts to attract cash-strapped customers and win over shoppers unnerved by a massive holiday-season data breach.
The third-largest U.S. retailer, however, said sales and traffic have improved in the past few weeks as the back-to-school season begins.
Target's shares rose 1 percent to $59.81 in noon trading.
The company's U.S. same-store sales rose more than 1 percent in July, Chief Financial Officer John Mulligan said in a statement. Sales have been "better" in August, driven by demand for back-to-school items, he said.
Sales at U.S. mass merchandisers such as Target and Wal-Mart Stores Inc have been hit this year as consumers struggling with stagnant wages and high inflation reduce spending.
On top of that, Target has run up big losses in Canada, where its ambitious expansion has stumbled due to supply chain issues and a backlash from customers who had expected prices to be more in line with those in the United States.
Target's same-store sales have either declined or failed to show growth in the past six quarters. Customer traffic has fallen for nine straight quarters, but is now showing signs of recovery.
The fall in traffic slowed to 1.3 percent in the second quarter from 2.3 percent in the first quarter. Continued...