Target Tumbles After Cutting Guidance, Reports Poor Comps; Drags Wal-Mart Lower
By Tyler Durden
US retailer woes continued this morning, a trend the began well prior to the poor holiday spending season, when retail giant Target not only announced ahead of its Feb 28 Q4 earnigns result that comparable sales during the combined November/December period decreased 1.3%, but that “as a result of this softer-than-expected sales performance, the Company updated its fourth quarter and full-year 2016 guidance.”
Target now expects fourth quarter comparable sales in the range of (1.5) percent to (1.0) percent, compared with prior guidance of (1.0) percent to 1.0 percent. In fourth quarter 2016, Target expects both GAAP EPS from continuing operations and Adjusted EPS of $1.45 to $1.55, compared with prior guidance of $1.55 to $1.75.
For full-year 2016, Target now expects GAAP EPS from continuing operations of $4.57 to $4.67, compared with prior guidance of $4.67 to $4.87. The Company expects full-year 2016 Adjusted EPS of $5.00 to $5.10, compared with prior guidance of $5.10 to $5.30. The 43-cent difference between these ranges reflects $0.44 of early debt-retirement losses and a $0.01 benefit from the resolution of income tax matters.
“While we were pleased with Black Friday sales, December digital sales growth of more than 40 percent and continued strength in our Signature Categories, these results were offset by early season sales softness and disappointing traffic and sales trends in our stores,” said Brian Cornell, chairman and CEO of Target.
Target shares tumbled as much as 4.9% on the news, which has dragged Wal-Mart as much as 1.5% lower.
Source: Target Tumbles After Cutting Guidance, Reports Poor Comps; Drags Wal-Mart Lower
