Target shares are tumbling in early trading following a disappointing showing in its latest earnings.
The big-box retailer (TGT) on Tuesday said that it generated $17.8 billion in revenue during the last quarter, a 5.6% jump compared to the same period in 2017. Same-store sales, an important measure in retail to see how stores are performing, rose 5.1%. Digital channel sales rose 49% during the period.
Target was able to post a $1.16 earnings per share, but cautioned that its margin rate fell from 29.6% in the third quarter of 2017 to 28.7% this year.
While Target was able to grow revenue and notch a solid profit, analysts had expected higher same-store sales figures. Analysts also expected a 29.6% gross margin instead of the 28.7% margin Target posted.
Soon after Target announced its earnings, shareholders started offloading shares over concerns there’s some weakness in Target’s business. The company did little to help its cause. In an earnings statement, Target said forecast 5% growth in same-store sales for the fourth quarter, which would be down sequentially from its revenue growth in the third quarter.
Still, quite a bit can happen in the critical fourth quarter holiday shopping season. Target, like other major retailers, is offering a slew of deals on products throughout its store this week for Black Friday and Cyber Monday and will continue to offer sales throughout the shopping season. Target also said that it would expand its toy section this year to attract more shoppers.