Reuters

(Reuters)

After Tepid December, Target Slashes 4Q View

By Retail FOXBusiness

Despite overall strength this holiday season from retailers, discount giant Target (TGT) disclosed weaker-than-expected December same-store sales and downgraded its earnings forecast on Thursday.

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The news from the Minneapolis-based retailer sent its shares slumping almost 4% ahead of the open.

Due to weakness in its electronics and music products, Target said its sales at comparable stores increased just 1.6% in the crucial month of December, missing expectations for growth of 3.1%.

“December sales were below our expectations as growth in Grocery and Beauty offset softness in Electronics and Music, Movies & Books," CEO Gregg Steinhafel said in a statement. "Sales and traffic were strongest in the week leading up to Christmas as guests waited to shop for last-minute gifts.”

Concerned by the December figures, management cut its fourth-quarter profit outlook to $1.35 to $1.43, compared with $1.43 to $1.53 previously. Even the high end of the new range would trail the Street’s view of $1.48.

Looking ahead, Target said it anticipates January same-store sales to rise in the low-to-mid single digits.

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Shares of Target retreated 3.78% to $48.11 ahead of Thursday’s open. The stock has rallied more than 30% over the past year.

Overall same-store sales at U.S. retailers were mostly positive as companies like Macy’s (M) and Limited Brands (LTD) beat expectations. However, others such as Costco (COST) and J.C. Penney (JCP) disappointed shareholders.

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