Target collapsed by 20.99% to $123.29 on the New York market. The American discount retailer revealed negative forecasts for the end of the year and results below consensus for the third quarter, in contrast to the performance signed yesterday by Walmart. The Minnesota-based firm expects stable comparable sales and earnings per share of between $1.85 and $2.45 in the fourth quarter, where analysts were targeting a 1.64% increase in sales and an EPS of 2 .66 dollars.
Annual EPS is anticipated between 8.3 and 8.9 dollars, below the consensus: 9.5 dollars.
“We maintain our Buy rating given the valuation and the fact that Target’s third quarter revenue was above our forecasts and the revenue outlook appears relatively stable despite the challenges encountered at the level of net income”, indicates Bank of America.
In the third quarter, earnings per share came to $1.85, down 12%, compared to a consensus of $2.3. Net profit fell by 12.1% to 854 million.
Furthermore, revenues reached $25.7 billion versus the consensus of $25.9 billion while comparable sales increased by 0.3%, compared to the consensus of an increase of 1.4%.
“Our earnings per share fell short of expectations due to weak consumer discretionary trends and multiple cost headwinds, including those unique to the quarter,” said Michael Fiddelke, chief operating officer of Target, which primarily sells non-essential items such as electronics and home decor.
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