Target saw its stock plunge by 21% on Wednesday after the retailer reported worse-than-expected third-quarter earnings and lowered the guidance for fiscal 2024.
Unlike its rival Walmart, which reported impressive financial results the day before, Target failed to attract customers to its stores and encourage them to spend money despite slashing prices of thousands of items and organizing early holiday sales.
Target reported earnings per share of $1.85 for Q3, while analysts expected $2.30 per share. The miss of almost 20% is its biggest since 2022. Its revenue also missed the mark for the first time in more than a year, coming at $25.67 billion compared to estimates of $25.90.
The company now predicts its adjusted earnings per share for the full year will come in a range from $8.30 to $8.90 compared to last quarter’s forecast of $9 to $9.70 per share. On the other hand, the analysts were expecting $9.50 per share.
Speaking during a conference call with reporters, CEO Brian Cornell attributed Target’s poor performances in Q3 to “lingering softness in discretionary categories” as well as costs stemming from October’s port strike.
The shares of Target nosedived by 21.41% on Wednesday to close at $121.72 per share and reach a 52-week low. The stock is now 14.94% down year-to-date.