Target says its sales rose 1.9 percent at established locations in the third quarter as it worked to revive its business by strengthening flagship categories like clothing and children’s products.
Still, the uptick was a slowdown from the previous quarter, when sales rose 2.4 percent at established locations. Growth of digital sales also slowed to 20 percent, and fell short of the company’s expectations. Previously, Target had forecast digital growth of 30 percent for the period.
Looking ahead to the critical year-end shopping season, Target CEO Brain Cornell also said that the Minneapolis-based company is confident about its plans and expects its sales to climb 1 to 2 percent for the final three months of the year. The company lifted the low end of its earnings outlook for the year.
A day earlier, Wal-Mart reported stronger-than-expected sales for its third quarter and said it expected an uptick in sales for the year-end shopping season. Moody’s Vice President Charlie O’Shea noted profit margins for retailers could be affected during the year-end shopping season as retailers rely on heavy promotions to draw customers.
For the three months ended Oct. 31, Target said its sales were driven by strength in signature categories including style, baby, kids and wellness.
Profit rose to $549 million, or 87 cents per share in the period. Not including one-time items, the company earned 86 cents per share, which was in line with Wall Street expectations, according to 12 analysts surveyed by Zacks Investment Research.
Revenue rose 2 percent to $17.61 billion. Seven analysts surveyed by Zacks expected $17.63 billion.
Target expects adjusted earnings of $4.65 to $4.75 per share for the full year. It previously forecast a range of $4.60 to $4.75 per share.
In trading Wednesday, Target shares dropped $3.13, or 4.3 percent, to $69.78.