Target Corp. (NYSE:TGT) saw its shares slip lower in early trade after warning of “highly competitive” holiday sales, despite posting market-beating third quarter results.
In a statement, the discount retailer said Wednesday that it provided a not so rosy profit outlook for the current quarter, blaming it on the "highly competitive" holiday sales environment.
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It said in the third quarter, net income to October 28, dropped to US$480mln or 88 US cents a share, from US$608mln or US$1.06 a share, a year ago.
Not including non-recurring items, adjusted earnings per share stood at 91 US cents, soundly beating market expectations for 86 US cents.
During the quarter, revenue rose by 1.4% to US$16.67bn, again beating market forecast for US$16.60bn.
Same-store sales growth also beat Wall Street’s expectations, coming in at 0.9% against hopes for 0.4%.
Comparable traffic grew by 1.4%, while comparable digital sales rose 24%.
Target said fourth-quarter adjusted EPS is expected to come in between US$1.05 to US$1.25, compared with analysts’ consensus for US$1.24.
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It also upped its full-year adjusted EPS guidance range to US$4.40 to US$4.60 from its earlier projection of US$4.34 to US$4.54.
However, same-store sales in the fourth quarter are expected to be unchanged to up 2%, against market’s consensus of a 0.5% growth.
Its shares were down 8.80% at US$54.84.