Target shares slide after earnings implosion
The stock fell by more than 3% Thursday after a quarter that showed a surprising plunge in profits.
By Burke Speaker
Target (TGT), an underperformer in 2013, was down more than 3% Thursday after releasing third-quarter earnings that showed profits plunging 47%.
The fall in earnings was mostly a result of expenses related to its Canadian expansion, The Minneapolis Star Tribune reported.
The company reported profits of $341 million, or 45 cents per share, which was well below last year's $637 million, or 97 cents a share. However, adjusted earnings came to 84 cents for the quarter, which was well above analyst expectations for 63 cents.
The real sticking points for the quarter were sales. Revenues increased 4% to $17.3 billion but fell under the analyst bar, and same-store-sales came in at 0.9% growth to miss the consensus estimate for 1.3%. Also, Target lowered full-year earnings forecasts to a range of $4.59 to $4.69 per share from a range of $4.70 to $4.90.
Target's stock has had a rocky road after an end-of-summer decline, and currently sits just 8% in the black year-to-date, vs. roughly 25% returns for the Standard & Poor's 500 Index ($INX).
Just a few days ago, InvestorPlace noted that Target earnings could take a hit because of cautious consumers and expansion woes in Canada, which have given TGT shareholders some room for pause. As Susan Aluise wrote:
"(The move) could eventually be a driver of growth for Target stock. But for now, the expansion is weighing on Target earnings. The company, which has opened 91 stores so far this year and plans an additional 33 by year’s end, has struggled with everything from higher costs to empty shelves so far."
More From InvestorPlace
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.