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* Expects adj EPS slightly below the low end of its prior outlook
* Stands by full-year adj EPS forecast of $4.85-$5.05
* Shares fall as much as 2 percent
April 16 (Reuters) - Target Corp warned earnings for the first quarter would miss its expectations on weaker-than-expected sales of seasonal and weather-sensitive items.
The discount retailer said adjusted earnings per share for the current quarter would come in slightly below the low end of its prior outlook of $1.10 to $1.20.
Target now expects same-store sales to be about flat. It had earlier forecast same-store sales to be flat to up 2 percent.
"We see this (outlook) as largely expected, given the far-reaching discussion of weak March retail sales," Stifel Nicolaus analyst David Schick said.
U.S. retail sales contracted for the second time in three months in March, falling 0.4 percent, a Commerce Department report said.
But readings for retail sales have been volatile so far this year, making it difficult to know whether the weakness in March was due to a tax hike that went into effect at the start of the year or to temporary factors related to the weather.
"Target (and retail overall) face difficult comparisons from the first quarter of 2012. So we see the first quarter update as non-issue essentially," Schick said in a note.
In its first quarter last year, Target reported a same-store sales gain of 5.3 percent, its strongest quarterly performance in more than six years at the time.
Target on Tuesday stood by its full-year forecast for adjusted earnings of $4.85 to $5.05 per share.
Target in February offered a cautious outlook for consumer spending in 2013 and Chief Executive Gregg Steinhafel said "the U.S. economy is growing at a painfully slow rate."
"We must acknowledge that seasonal categories are more discretionary and more economically sensitive, particularly following the payroll tax increases at the beginning of the year," analyst David Strasser of Janney Capital Markets wrote in a note.
Strasser was expecting comparable-store sales to rise 0.5 percent.
Target is undergoing a year of transition in which it is selling its credit card portfolio to Toronto-Dominion Bank and opening 124 Canadian stores.
It expects net accounting gains of about 36 cents from the sale of the credit card portfolio and a dilution of about 23 cents related to its Canadian business to net earnings per share in the first quarter.
The company expects to report its first-quarter numbers on May 22.
Shares of the Minneapolis, Minnesota-based company were down marginally at $68.01 in afternoon trading on the New York Stock Exchange on Tuesday.