Target blames weather for soggy results
Like rival Wal-Mart, it's pointing the finger elsewhere for its problems while other retailers are coping just fine.
Target earned $498 million, or 77 cents a share, down 40% from $697 million, or $1.04 a share, a year earlier. Sales rose 1% to $16.7 billion. The results lagged analysts' forecasts for profit of 84 cents a share and revenue of $16.8 billion, according to Bloomberg. Worse, Target also cut its earnings outlook for the year.
Target CEO Gregg Steinhafel said the company was "disappointed in our first quarter performance," which he attributed to soft sales in apparel and other weather-sensitive products. He also stressed confidence in Target's strategy, including plans to expand in Canada.
While it's true that cool spring weather doesn't put consumers in the mood to buy summer apparel and that discretionary income is getting squeezed by higher Social Security taxes, that can't be the whole story because other retailers facing the same issues are doing fine.
TJX (TJX) the parent of TJ Maxx and Marshall's, reported on Wednesday that net income rose to $604.8 million, or 82 cents a share, as sales increased 7% to $6.2 billion. The company's earnings guidance was below expectations. TJX's chains have 1,943 locations, and the retailer expects the market to support 2,400 to 2,600 stores, 100 to 200 more than it earlier forecast.
Kohl's (KSS) profit was $147 million, or 66 cents a share, versus $154 million, or 63 cents a share, a year earlier. That beat the 57 cents a share analysts had forecast. Sales fell 1% to $4.2 billion, slightly lagging the $4.26 billion analysts had expected. Nonetheless, Wall Street pushed up the discount retailer's share price in early trading.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
Target is overpriced and the stores in my area are set up poorly for shopping convenience.
Not to mention they think they can be all pushy in their political views by degrading those who don't believe with their stances. I'd rather shop somewhere that just wants to sell stuff.
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There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups ... More
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