Target’s earnings come in ahead of expectations, but revenue falls short in the first quarter sending shares south
US retailer Target has posted mixed results for its last three months of trading, beating expectations on profit but missing on like-for-like sales.
The second-largest discount retailer in the US behind Walmart reported net earnings for the three months to 30 April came in at $632m (£433m) or $1.29 per share, down slightly on the same period of 2015.
The company, based in Minneapolis, felt the ire of investors as shares ditched over seven per cent in the pre-market.
Target is currently battling with a boycott campaign that has seen well over a million people sign a petition against its support of transgender rights.
Critics have been holding protests at stores across the US and its thought sales may drop for at least short period, according to a YouGov BrandIndex survey.
Target's share price has lost ground due to the negative publicity around the protests – down around 10 per cent in the last month – and today's results have pushed it into negative territory for the year.
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The US retail landscape is currently holding up better than that in the UK, with inflation at least moving in the right direction.
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Brian Cornell, Target's chairman and chief executive, said:
We are pleased with our first quarter financial results, which demonstrate the effectiveness of our strategy in an increasingly volatile consumer environment.
With an outstanding team, a resilient business model and a strong balance sheet, we plan to successfully implement our long-term strategy, even in the face of a challenging short-term consumer landscape.
Revenue for the quarter came in at $16.20bn, down from last year's $17.12bn.
Analysts had pencilled in earnings per share of $1.19 on revenue of $16.31bn, according to a Reuters poll.
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Investors were most put off by a warning from the retailer that a slowdown in demand would mean second-quarter comparable sales would be flat to down two per cent even.
It reiterated its target for earnings of $1.00 to $1.20 per share before special items however.