Shares of Target (NYSE: TGT) sank Wednesday after the retailer reported first-quarter earnings that missed expectations on the top and bottom lines, which it blamed on poor spring weather.
For Target, sales of non-seasonal products like food and beverages helped buffer the impact of the weather.
Still, the performance is likely to rattle investors who have been closely watching Target's efforts to reinvent its business, focusing on new, smaller format stores, a push into private-label brand and delivery capabilities. The discounter also has been investing in its e-commerce business.
Target also offered a wide range of expectations for second-quarter adjusted earnings per share, saying it anticipates them to range between $1.30 and $1.50, in contrast to last year's far slimmer range of $1.21 and $1.22.
The Minneapolis-based retailer reported net income of $718 million, or $1.34 a share. On an adjusted basis, Target earned $1.32 a share, below expectations of $1.39 a share.
It reported revenue of $16.56 billion, 3.5% more than the same quarter last year, but below expectations of $16.58 billion.
Target has been forging ahead with a plan to reinvest more than $7 billion back into the company through 2020.
Target's remodeled stores are beginning to feature more fresh food, produce and prepared options for shoppers in a hurry. The number of shoppers heading to Target rose 3.7% during the quarter — its strongest performance in more than 10 years.
This past quarter, Target completed 56 remodels and opened seven new stores. It also launched its temporary partnership with boot and apparel brand Hunter.
Shares of Target dwindled $3.79, or 5%, to $71.68 Wednesday.
