(Reuters) – The American distribution group Target warned on Wednesday of persistent weakness in consumer demand after publishing results below expectations in the first quarter and forecasts for the current quarter well below consensus.
Target shares fell 8% in pre-stock trading in New York as the group’s publication contrasted with that of its great rival Walmart, which raised its annual targets last week.
Target’s first-quarter adjusted profit came in at $2.03 per share, compared to analysts’ expectations of $2.06, according to LSEG data.
For the current quarter, Target expects comparable sales to be flat or up up to 2%, and adjusted earnings of $1.95 to $2.35 per share. Analysts on average had expected a 1.39% increase in comparable sales and earnings of $2.19 per share.
“We remain cautious about our near-term growth outlook and expect consumer discretionary trends to remain under pressure in the near term,” Christina Hennington, the group’s chief growth officer, said during a press conference.
Shoppers remain “worried” due to rising interest rates, economic uncertainty and rising credit card balances, she added, noting that consumer confidence had seen a boost. significant drop in April.
Comparable sales for the first quarter ended May 4 fell 3.7%, in line with expectations, marking the fourth consecutive decline. The healthy level of sales of beauty products partially offset the slowdown in discretionary items such as home furnishings, furniture and appliances.
Target maintained its full-year guidance, with comparable sales expected to be flat or up up to 2%, and earnings in the range of $8.60 to $9.60 per share.
(Reporting Siddharth Cavale in New York, Savyata Mishra and Ananya Mariam Rajesh in Bangalore; French version Lina Golovnya, editing by Blandine Hénault)
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