Target (TGT.US) Falls Over 19% As It Lowers Full-Year Earnings Expectations

Target (TGT.US) shares fell on Wednesday, down more than 19% at the time of writing to $125.14. The company cut its full-year profit forecast and warned that weaker sales and increased inventory hurt profitability. It now expects full-year EPS of $8.30-$8.90, below the previous forecast of $9-$9.70. Target's Q3 revenue was US$26.57bn, up 1.1% YoY, missing market expectations; Non-GAAP EPS was US$1.85, missing market expectations. Comparable sales only grew 0.3% in Q3, missing analyst expectations, and slowed from the previous quarter. Specifically, comparable sales at stores fell 1.9%, while digital comparable sales grew nearly 11%. Higher fulfillment costs from increased online sales also hurt operating margins. Target's comparable sales growth slowed in Q3, with comparable sales at stores down 1.9% and digital comparable sales up nearly 11%. Higher fulfillment costs from increased online sales also hurt operating margins.