Target (NYSE:TGT) had been expected to be a standout among retailers for holiday sales, but the big box retailer reported disappointing results, causing a severe dip in its stock price at Wednesday’s open.
Target said its same-store sales during November and December were up just 1.4%, compared with growth of 5.7% a year earlier.
The company said that, despite missing the mark, it is maintaining a prior outlook for fourth-quarter earnings. It also said in a press release that the fourth quarter of 2019 remains on track to mark Target’s 11th-consecutive quarter of same-store sales gains.
Target said it found strength in apparel and beauty, while lackluster performance in key holiday categories like electronics, toys and parts of its home business offset those gains.
CEO Brian Cornell said Target "faced challenges throughout November and December in key seasonal merchandise categories.” But “because of the durability of our business model, we are maintaining our guidance for our fourth quarter earnings per share."
Especially this holiday season, Target was expected to be a winner in the toys category. The company has been devoting more square footage in stores to toys, following Toys R Us’ liquidation. It has partnered with Disney to open mini Disney shops within certain Target shops. Target also is now powering the website of the Toys R Us brand that has relaunched post bankruptcy.
But this holiday season, Target said toy sales were about flat with the prior year. The company did say, however, that it continued to gain market share in toys throughout the holidays.
Shares plummeted $7.03, or 5.6%, to $118.23
