Target Corp.'s stock dropped 3.3% in premarket trade Wednesday, after the discount retail giant reported a fiscal second-quarter profit that beat expectations but provided a downbeat outlook. For the quarter ended July 30, earnings fell to $680 million, or $1.16 a share, from $753 million, or $1.18 a share, in the same period a year ago. Excluding non-recurring items, such as early debt-retirement losses, adjusted earnings per share came in at $1.23, above the FactSet consensus of $1.13. Revenue fell 7.2% to $16.17 billion, matching the FactSet consensus. Same-store sales declined 1.1%, compared with the FactSet consensus of a 0.9% decline. Looking ahead, Target expects third-quarter adjusted EPS of 75 cents to 95 cents, compared with the FactSet consensus of 96 cents. For the full year, the net EPS outlook was cut to a range of $4.36 to $4.76 from $4.76 to $4.96, while the adjusted EPS outlook of $4.80 to $5.20 surrounds the FactSet consensus of $5.13. "While we recognize there are opportunities in the business, and are addressing the challenges we are facing in a difficult retail environment, we are pleased that our team delivered second quarter profitability above our expectations," said Chief Executive Brian Cornell. The stock has gained 4% year to date through Tuesday, while the SPDR S&P Retail ETF has climbed 6% and the S&P 500 has advanced 6.6%.
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