Target reported a steeper-than-expected decline in fourth-quarter same-store sales and said it expected sales to continue to fall this fiscal year, sending its shares tumbling 12 percent in premarket trading on Tuesday.
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The company has struggled with declining sales as shoppers increasingly gravitate to online retailers such as Amazon.com and spend more on big-ticket purchases such as cars and home renovations rather than electronics, food and apparel.
The big box retailer's net income slumped to $817 million, or $1.45 per share in the fourth quarter ended Jan. 28, from $1.43 billion, or $2.32 per share, a year earlier.
Analysts on average were expecting a profit of $1.51 per share, according to Thomson Reuters I/B/E/S.
Sales at stores open for at least a year fell 1.5 percent, missing the average analyst estimate of a decline of 1.3 percent, according to research firm Consensus Metrix.
Net sales fell 4.3 percent to $20.69 billion, declining for the sixth quarter in a row.
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Target forecast same-store sales would fall in the low- to mid-single digit percentage range in the first quarter and that it would earn $0.80-$1.00 per share from continuing operations in the period.
The Minneapolis-based retailer said it expected a low-single digit decline in full-year comparable sales, and forecast full-year earnings from continuing operations of $3.80-$4.20 per share.
Target's shares slumped 12 percent to $58.90 in premarket trading.
The stock has fallen about 6 percent since Target warned in January that weak holiday sales and deep discounts in a competitive environment would hurt fourth-quarter margins and earnings.
(Reporting by Richa Naidu in Bengaluru; Editing by Savio D'Souza)
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