The discounter’s second-quarter net income fell almost 10 percent.
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According to the Journal, since he took over in 2014, Target CEO Brian Cornell has made several efforts to revamp the grocery business, which accounts for a fifth of Target’s revenue.
The company’s second-quarter results and its forecast were yet more proof that spending patterns have been changing, with consumers more interested in spending to remodel their homes or at off-price and online outlets while department stores and general merchandise stores have been struggling.
For Target, digital sales continued to slow during the period, rising 16% versus 23% in the first quarter and just about half the pace logged a year earlier.
It’s also trying to pump up grocery sales, which represents about 20 percent of its total business.
The company said second-quarter adjusted earnings per share came in at $1.23, up 0.5% from the same period previous year, as sales fell 7.2% to $16.2bn.
Target shares were down 4% to $75.48 in pre-market trade.
The company now expects comparable sales in the third and fourth quarter to be flat to 2% lower versus a previous estimate of 1.5% to 2.5% growth.
Net income for the quarter was $680 million, or $1.16 cents per share. Three months ago, Target guided to second-quarter earnings in a range of $1 to $1.20 a share.
Adjusted per-share earnings were $1.23, easily beating projections of $1.14 from Wall Street, according to a survey by Zacks Investment Research.
“While we recognize there are opportunities in the business, and are addressing the challenges we are facing in a hard retail environment, we are pleased that our team delivered second quarter profitability above our expectations”, said Target CEO Brian Cornell, in a statement.
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Elements of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.
