Target Earnings Implode, TGT Stock Sinks

by Burke Speaker | November 21, 2013 9:14 am

2013 underperformer Target (TGT[1]) is down again this morning, after TGT released earnings that showed profits plunged 47% in the third quarter.

target-stock-tgt[2]The fall in Target earnings were mostly a result of expenses related to its Canadian expansion, the Minneapolis Star Tribune reported[3]. TGT stock is off around 4% as a result.

Target reported profits of $341 million (45 cents per share of TGT stock), which was well below last year’s $637 million (97 cents). However, adjusted earnings came to 84 cents for Q3, which was well above analyst expectations for 63 cents.

The real sticking points for the quarter were sales. TGT revenues increased 4% to $17.3 billion but fell under the analyst bar, and same-store-sales came in at 0.9% growth to miss the consensus estimate for 1.3%. Also, the Target earnings report showed a lowered full-year earnings forecast to a range of $4.59 to $4.69 per share of TGT stock from a range of $4.70 to $4.90.

TGT stock has had a rocky road after an end-of-summer decline, and currently sits just 8% in the black year-to-date, vs. roughly 25% returns for the S&P 500.

Just a few days ago, InvestorPlace noted that Target earnings could take a hit[4] because of cautious consumers and expansion woes in Canada, which have given TGT stock shareholders some room for pause. As Susan Aluise wrote:

“(The move) could eventually be a driver of growth for Target stock. But for now, the expansion is weighing on Target earnings. The company, which has opened 91 stores so far this year and plans an additional 33 by year’s end, has struggled with everything from higher costs to empty shelves so far.”

TGT stock wasn’t the only retail casualty this morning. Retail stocks across board are getting pounded this morning, with Dollar Tree (DLTR[5]), Sears (SHLD[6]) and Abercrombie & Fitch (ANF[7]) all opening in the red.

  1. TGT:
  2. [Image]:
  3. Minneapolis Star Tribune reported:
  4. Target earnings could take a hit:
  5. DLTR:
  6. SHLD:
  7. ANF:

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