trending Market Intelligence /marketintelligence/en/news-insights/trending/C77snRIspkIIhQR3OfRGvA2 content esgSubNav
In This List

Target lowers Q4 guidance on weaker-than-expected holiday sales

Blog

Insight Weekly: SVB fallout limited; US rents up; renewable natural gas investments flow in

Blog

Bank failures: The importance of liquidity and funding data

Blog

A Cloud Migration Plan for Corporations featuring Snowflake®

Blog

Essential IR Insights Newsletter - February 2023


Target lowers Q4 guidance on weaker-than-expected holiday sales

Target Corp. on Jan. 15 reduced its guidance for fourth-quarter sales growth due to weakness over the holiday season, particularly in electronics and toys. In premarket trading in New York, its shares were indicated to open down 7.2%.

The Minneapolis-based general merchandise retailer lowered its guidance for fourth-quarter sales growth to 1.4% from a prior range of 3% to 4% although it maintained its estimates for EPS growth, citing the relative performance of higher- and lower-margin categories.

Target's revised guidance is in line with its comparable sales growth in the November-December period of 1.4%.

"We faced challenges throughout November and December in key seasonal merchandise categories and our holiday sales did not meet our expectations," Chairman and CEO Brian Cornell said in a statement.

"For the holiday period specifically, sales results came in below our expectations as we experienced softer-than-expected performance in areas of our business that are critical during the season, including electronics, toys and portions of our home assortment," Cornell added. "Because these categories account for a much higher portion of sales during the holidays, they have a larger impact on our overall sales growth as compared to the rest of the year."

Cornell said the retailer had seen continued strength and market share gains in apparel, beauty, essentials and food and beverage.

Target's guidance for earnings was unchanged from the third quarter. It anticipates fourth-quarter GAAP EPS from continuing operations of $1.55 to $1.75 and adjusted EPS of $1.54 to $1.74. For the full year 2019, it expects GAAP EPS from continuing operations of $6.27 to $6.47 and adjusted EPS of $6.25 to $6.45.

In a leadership reshuffle, Target said Executive Vice President and Chief Stores Officer Janna Potts would retire after 30 years with the company. Potts will be succeeded, effective immediately, by Mark Schindele, previously senior vice president of properties.

Target also said it would formalize the interim structure of its merchandising organization announced in October 2019. It appointed Christina Hennington as executive vice president and chief merchandising officer for hardlines, essentials and capabilities, and Jill Sando as executive vice president and chief merchandising officer for style and owned brands. "This structure reflects the size, scale and complexity of Target's multi-category commercial businesses and operations," according to the release.

In premarket trading in New York, Target's shares were indicated to open down $9.00, or 7.2%, at $125.25.