Target Corp.’s profit badly lagged behind Wall Street’s estimates in the second quarter, and the retailer ratcheted up the pressure on its fiscal second half by sticking with its forecast of a dramatic rebound in its results.
Adjusted earnings tumbled to 39 cents a share during the three months ending July 30, hit by an aggressive push to reduce inventory, Target said in a statement Wednesday. That trailed the lowest analyst estimate compiled by Bloomberg. On average, Wall Street had expected 72 cents.
The profit plunge — a sharp contrast to Walmart Inc.’s better-than-expected results released Tuesday — reflects decisions Target outlined in June to slash prices on home appliances, patio furniture and other discretionary items as customers pulled back from a two-year spending spree. Now, Target says it’s poised to benefit from strong customer traffic, and the company maintained its outlook for operating income of about 6% of sales during the second half.
