Target Missed the Mark this Holiday Season and Fell Short on Growth Predictions
Target’s November-December sales rose 1.4% for stores and digital channels operating for at least 12 months, the company said Wednesday. It warned that growth for its full fiscal fourth quarter, which includes January, would likely fall short of the 3% to 4% gain it previously predicted.
“We faced challenges throughout November and December in key seasonal merchandise categories and our holiday sales did not meet our expectations,” said CEO Brian Cornell, who after taking the helm in 2017 launched a plan that included store remodeling and investment in Target’s digital platform.
The Minneapolis-based chain cited weak sales of toys and electronics, two big sellers during the gift-giving season. It also said Wednesday it was appointing a new executive to oversee its roughly 1,800 stores.
A government report on December retail sales released Thursday provides a more detailed picture of Target’s shortfalls. Investors are also waiting to hear from Walmart which is by far the country’s biggest retailer, which is slated to report quarterly results next month. That should give a us a better idea of how the consumer is doing along with Matercard and Visa.
Market researcher NPD Group this week said holiday results were lackluster, estimating that total sales rose 0.2% from a year earlier. The National Retail Federation is also expected to update its estimate on Thursday; the group had predicted more than 3% growth in holiday sales in stores and online.
Target’s shares nearly doubled last year and closed near an all-time high on Tuesday. They fell 6.6% to $117 on Wednesday