Target reported earnings Wednesday that came in far below Wall Street’s expectations, something the big-box retailer attributed to slower than expected demand.
The company announced profits that fell short of forecasts by 20%, its widest miss in two years. Revenues, meanwhile, came in under expectations for the first time in more than a year.
Target’s stock, as a result, fell more than 21% Wednesday.
The discouraging results came despite a heavily touted campaign to discount thousands of items, as well as a pushed-up holiday sale.
On a call with reporters, Target CEO Brian Cornell blamed the dismal quarter on “lingering softness in discretionary categories,” as well as costs associated with preparing for the short-lived port strike in October.
Target Chief Operating Officer Michael Fiddelke added that it was “disappointing that a deceleration in discretionary demand combined with some cost pressures have caused us to take our guidance back down after raising it last quarter.”
The company lowered its profit and sales goals for the year, though Fiddelke said Target feels confident in its long-term outlook.
Broader stock trading did not immediately react, however, as Wall Street awaits earnings from chipmaker Nvidia, which has helped power the market higher throughout the year. Yet, combined with other indicators like slower holiday hiring, it could be a signal that sales for the all-important final calendar quarter could be softer than hoped.
Target’s report comes a day after rival Walmart reported earnings and revenues that beat expectations.
Yet, even Walmart noted that customers were still holding back in many cases for compelling deals, especially as the cost of food has risen.
“We’re expecting this holiday period to be very consistent with that,” Walmart Chief Financial Officer John David Rainey told CNBC. “They’re focused on price and value.”