Target Posts Weak Financial Results And Lowers Guidance

U.S. discount retailer Target (TGT) has reported weak first-quarter financial results and lowered its forward guidance due to tariff uncertainty. The Minneapolis-based company announced earnings per share (EPS) of $1.30 U.S., which was well-below the $1.61 U.S. expected on Wall Street.Revenue in the quarter totaled $23.85 billion U.S., which fell short of the $24.27 billion U.S. that was the consensus expectation of analysts. Sales were down 3% from a year earlier. Management blamed weaker discretionary spending on the part of consumers for the poor Q1 results. Target’s sales and profits are also being hurt by uncertainty related to import tariffs and a public backlash against the company’s rollback of its diversity, equity and inclusion (DEI) policies.Transactions across Target’s stores and website during the quarter fell 2.4%. The average amount customers spent during their online and in-store visits dropped 1.4%, said management.Comparable sales declined by 3.8% in the quarter compared to a year ago. In-store comparable store sales fell 5.7% while digital sales grew 4.7%.Target’s annual revenue has been roughly flat for four years in a row. On a conference call with analysts and media, Target Chief Executive Officer (CEO) Brian Cornell blamed the retailer’s problems largely on the U.S. economy. In terms of forward guidance, Target said it now expects a low-single digit decline in sales this year, compared to a previous forecast of sales growth of about 1%. Earnings per share are forecast at $7 U.S. to $9 U.S. compared to a previous range of $8.80 U.S. to $9.80 U.S. Management acknowledged that Target will likely increase prices on some items to help cover tariff-related costs. About half of what Target sells is from the U.S. The stock of Target has declined 29% this year to trade at $98.12 U.S. per share. The stock is down 17% over the last five years.