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MINNEAPOLIS, United States — Target Corp issued an underwhelming profit forecast for the key holiday quarter, as it continues to depend on price cuts to drive traffic to its stores and websites, sending its shares down 3 percent in premarket trade.
The department store operator forecast adjusted earnings of $1.05 to $1.25 per share for the quarter ending January 2018, largely below the average analyst estimate of $1.24.
The company's same store sales in the third quarter, however, topped estimates, driven by online sales.
Sales at the retailer's stores open at least a year increased 0.9 percent, above the average analyst estimate of 0.4 percent, according to Thomson Reuters IBES.
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Comparable online sales jumped 24 percent and contributed 0.8 percentage points to Target's total comparable sales growth.
Net income fell to $480 million, or 88 cents per share, in the third quarter ended October 28, from $608 million, or $1.06 per share, a year earlier, on higher selling and general expenses.
Excluding items, the company earned a profit of 91 cents per share, beating the average analyst estimate of 86 cents.
Sales rose 1.4 percent to $16.67 billion.
By Sruthi Ramakrishnan and Richa Naidu; editor: Saumyadeb Chakrabarty.
