Target reported solid third quarter 2017 results, but the mood was dampened by a disappointing earnings outlook for the holiday season.
Third quarter sales increased 1.4% to $16.7 billion, up from $16.4 billion last year, but segment profits fell 17.8% to $869 million, from $1,057 billion last year. Clearly, Target has cut prices aggressively, but still ended up having just 1.4% in sales growth to show for it.
The intense pressure from Amazon and Wal-Mart has been taking a toll on the company’s price positioning, which has now started to hurt its bottom line.
Target expects holiday period comparable sales growth to be flat to 2%, not an impressive number considering the current state of the U.S. retail market.
Key Figures from Third Quarter 2017 Earnings:
- Revenue of $16.67 billion beat expectations by $70 million
- Earnings per share of $0.91 beat expectations by $0.05
- Comparable Store sales growth of 0.9%, compared to 0.2% decline last year
- Expects fourth quarter EPS of $1.05 to $1.25, less than Wall Street forecast of $1.27
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