Reuters is reporting Target cuts Dec same-store sales expectations.
Target Corp (TGT) warned on Monday that its December same-store sales were below expectations and said it now expects sales at stores open at least a year in the range of down 1 percent to up 1 percent, adjusted for a calendar shift.
While more consumers came to its stores at the end of the third week of the month, the increase was not enough to make up for weak sales following Thanksgiving that carried over into December, the discount retailer said.
Given the lower forecast, Target said December sales are likely to fall “well short of the meaningful improvement” it had earlier said was needed to achieve fourth-quarter earnings-per-share growth.
Earlier this month, Target reported disappointing November results. It also said sales were soft in the last week of November and if weak sales trends continued, its December same-store sales would fall short of its forecast.
The discount retailer had forecast December same-store sales would rise 3 to 5 percent on a calendar-adjusted basis.
On an inflation adjusted basis these sales were exceptionally weak.
Professor Depew was noting Target Confirms What We Already Knew in point number 1 of today’s Five Things.
Late on Christmas Eve, when few were looking, Target (TGT) confirmed what we already knew, that retail sales will likely decline in December as consumers cut back on shopping.
- Target said same-store sales may post anywhere from a 1% decrease to a lower-than-expected 1% increase.
- For perspective, Target had previously predicted a gain of as much as 5%.
- Meanwhile, retailers left with perhaps more inventory than anticipated are busy slashing prices in the days after Christmas.
- Price cuts of 50% to 75% are being promised by retailers such as Macy’s (M), Kohl’s (KSS), Bloomingdales and Saks Fifth Avenue (SKS).
- On one bright note, however, not all retailers are slashing all prices.
- According to the Wall Street Journal, Williams-Sonoma (WSM) and Limited (LTD) are debuting some new, full-priced merchandise.
Price cuts of 50-75% huh? Are stores making any money? Isn’t that more important than same store sales?
Weak same store sales and huge discounts are signs of over expansion and/or too much competition. That explains why Target Corp. (TGT), Home Depot Inc. (HD), Wal-Mart (WMT), Lowes (LOW) and other big-box retailers are pulling the plug on new-store plans. See Commercial Real Estate Dominoes Collapse for forward implications of these cutbacks in planned growth.
Mike “Mish” Shedlock
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