Target (NYSE:TGT) revealed a 29% slump in first-quarter profits on Wednesday, prompting the discount retailer to trim its full-year forecast.
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Shares of the retail giant, which blamed the profit drop in part on poor weather, retreated more than 2% in the wake of the disappointing results and gloomier guidance.
Target said it earned $498 million, or 77 cents a share, last quarter, compared with a profit of $697 million, or $1.04 a share, a year earlier.
Excluding one-time items, it earned 82 cents a share, which is below the Street's view of 85 cents.
Revenue slipped 1% to $16.71 billion, trailing consensus calls from analysts for $16.78 billion. Same-store sales shrank 0.6%.
“Target's first quarter earnings were below expectations as a result of softer-than-expected sales, particularly in apparel and other seasonal and weather-sensitive categories," CEO Gregg Steinhafel said in a statement. “While we are disappointed in our first quarter performance, we remain confident in our strategy.”
In another negative, Target downgraded its 2013 non-GAAP EPS forecast to $4.70 to $4.90, compared with $4.85 to $5.05 previously. However, even the low end of the new view would exceed estimates from analysts for EPS of $4.48.
For the ongoing second quarter, Target sees non-GAAP EPS of $1.09 to $1.19, which is above the Street’s view of $1.06.
Target said it repurchased about 8.5 million shares of its common stock during the first quarter at an average cost of $64.04, equaling a total investment of $547 million.
Minneapolis-based Target saw its shares decline 2.15% to $69.73 ahead of Wednesday’s opening bell, putting them on pace to trim a 2013 rally of about 20%.