Target’s sales flatlined for the third quarter, a sign the business is struggling to generate meaningful growth, according to an analyst.

The chain’s net sales for the three months ended November 2 rose 0.9 per cent year-on-year to $25.2 billion. Comparable sales grew 0.3 per cent, with comparable store sales down 1.9 per cent and comparable digital sales up 10.8 per cent.

According to GlobalData MD Neil Saunders, the flat results occurred in a period with multiple banner events like back to school and Halloween and was against the backdrop of a very poor prior year.

“While the sun is shining on Walmart, Target is sitting glumly in the shade. These results, while not a complete disaster, show that the business is struggling to generate meaningful growth,” he added.

While the current consumer mood is not aligned in Target’s favor, many of the factors driving down growth are internal, Saunders continued. He cited the inconsistent store standards, frustrating checkout process, and poor customer experience, which translated into negative comparable sales at physical stores.

Another issue is that there is not enough newness and excitement in core categories across home and apparel, the analyst stated. The grocery business is also a weak spot, he added, as the chain continues to lose customers in categories like household goods to more value-oriented players.

On the bottom line, operating income slid 11.2 per cent and net earnings were down 12 per cent. 

For the fourth quarter, the company expects comparable sales to continue to be flat, despite the upcoming holiday season.

“Target will end its year on a discordant note and will start its new fiscal with a heap of problems to resolve,” Saunders said. While the hope for a stronger economy next year may give the company some breathing space, many improvements still need to be made, he concluded.