Target’s Stock Tumbles 21% Following Major Earnings Shortfall and Downgraded Forecast
Target Corporation witnessed a 21% plunge in its stock on Wednesday, marking its largest earnings shortfall in two years. The retailer reported adjusted earnings per share of $1.85, significantly lower than the anticipated $2.30. Revenue was reported at $25.67 billion, which failed to meet the estimated $25.87 billion.
The Minneapolis-based retailer also took a drastic step by cutting its full-year earnings guidance to a range of $8.30 to $8.90 per share, a noticeable drop from the previous forecast of $9 to $9.70. This disappointing outcome occurred despite the company’s aggressive strategy to reduce prices on thousands of items, encompassing 7,000 products across food and essentials.
CEO Brian Cornell attributed the dismal performance to “lingering softness in discretionary categories” and the costs incurred in preparation for the October port strike. The results were particularly stark when juxtaposed with Walmart’s robust earnings report released just a day earlier, implying that Target may be ceding market share to its larger competitor.