Target Corporation booked lower revenue in the third quarter attributed to a decline in sales amid cost of living pressures.
The company’s sales slid 4.3 per cent to $25.0 billion.
“This indicates ongoing consumer pressures and a pullback in spending – something that has hit Target harder than most due to the more discretionary nature of its proposition,” said Neil Saunders, GlobalData MD.
“As the consumer mood has soured, the economic tide has turned against Target and made trading much tougher. This may only occur at the margins, with the odd consumer buying a couple fewer items or reducing visit frequency modestly – but this is sufficient to push sales growth firmly into the red.”
Saunders added that while he expects Target’s holiday line-up to be favorable, customers do not welcome its decision to lock up some items such as men’s underwear and socks in cabinets and limit the number of items that can be taken through self-checkout.
Meanwhile, gross margin increased to 27.4 per cent as net earnings jumped 36.3 per cent to $971 million.
For the fourth quarter, Target forecasts sales to be in a wide range around a mid-single-digit decline.
“Looking ahead, we’re continuing to make investments throughout our business – in our assortment, our team and the services we offer – to provide the newness, affordability and convenience our guests want during the holiday season and beyond,” said Brian Cornell, chair and CEO at Target.
