Target’s (TGT) stock is down nearly 10% after the discount retailer posted mixed financial results as consumers bought fewer discretionary items and groceries in the year’s first quarter.
The Minneapolis-based retailer reported earnings per share (EPS) of $2.03 U.S. versus $2.06 U.S. that was forecast among analysts.
The latest print marked the first time since November 2022 that Target missed profit expectations.
Revenue in the first three months of the year totaled $24.53 billion U.S. compared to $24.52 billion U.S. that was anticipated on Wall Street. Target’s sales were down 3% from a year ago.
Customer traffic, which includes online and in-store shopping, fell 1.9% in Q1, while the average amount that customers spent per visit declined 1.9%.
Same-store sales decreased 3.7% as shoppers bought fewer discretionary items such as apparel and products for the home.
In a bright spot, digital sales at Target grew 1.4% in Q1 from a year earlier. It was the first increase in digital sales in more than a year.
To help attract price sensitive consumers, Target has relaunched its loyalty rewards program, and announced that it is cutting prices on thousands of items, including milk and diapers.
Like other retailers, Target is trying to attract consumers who are not spending as much on clothing, home goods or other discretionary items due to higher prices.
Despite the difficult Q1 print, Target retained its forward guidance, saying it expects comparable sales will remain flat to up 2% and earnings per share of $8.60 U.S. to $9.60 U.S. this year.
Prior to today (May 22), Target’s stock had increased 3% in the last 12 months to trade at $155.78 U.S. per share.