Target Corp, the Minneapolis-based retail giant, reported another decline in quarterly profits and issued a cautious outlook for sales and profits in the current period.
The company cited rising costs, including theft, and consumers' cautious spending behavior as contributing factors.
However, Target still exceeded Wall Street expectations and maintained its annual profit guidance above industry analyst projections, leading to a 1.4% increase in shares before the opening bell.
Target's first-quarter net income declined nearly 6% to $950 million, or $2.05 per share, compared to $1.01 billion, or $2.16 per share, in the same period last year. However, sales rose 0.6% to $25.32 billion, slightly beating analysts' expectations.
The company's profit decline marks the fifth consecutive quarter of slipping profits, although the decline was smaller this time.
Target cited theft as a significant factor impacting profitability and projected an additional $500 million in theft-related losses for the current year, adding to the $750 million incurred in the previous fiscal year. The company said it will address the issue through security measures, including expanded security and locked-up items, to avoid store closures that would negatively impact workers and communities.
Despite the challenges, Target maintains its full-year profit guidance and plans to invest up to $5 billion this year in store and online improvements, including drive-up return services, store renovations, and enhancements to online shopping experiences.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas