Target sees full-year sales dropping at existing stores. That surprised Wall Street, and shares plummeted. Fred Katayama reports.
Target shares tumbling after missing a number of Wall Street's targets, including its outlook. Quarterly traffic growth at stores was anemic. Sales fell for the sixth straight quarter. Profit plummeted nearly 43 percent. Hurting the bottom line: pressure from discounting and clearance and costs to shift to digital channels from its physical stores. Target sees the gloom continuing. It forecast a surprise drop in full-year sales at existing stores. Analysts were expecting an increase. By contrast, rival Wal-Mart reported strong sales by pulling in more customers at its stores and online. Target CEO Brian Cornell said the retailer would work to ensure its goods are more competitively priced and invest more in its physical and online businesses. Cowen analyst Oliver Chen said, "Target could be losing share and physical store visits as shoppers gravitate toward more clear bargains at Wal-Mart and increasingly use Amazon." Target shares plunging at the start of trade, deepening their 7 percent loss this year.