Target Cuts Full-Year Forecast

Big-box retailer Target missed its revenue mark on Wednesday and cut its yearly revenue predictions as shoppers contended with reduced spending power in the face of high inflation.

The retailer also lowered its yearly sales and profit goals. This darker view comes even when most analysts are moving away from fears of a recession and official data shows prices might be stabilizing.

Target now predicts a mid-sized sales drop for the year and earnings per share of $7 to $8. Before, it hoped for a small sales rise or drop and earnings per share of between $7.75 and $8.75.

Though Target's forecast was weak, its shares jumped in early trading as its quarterly profit was better than predicted.

After huge sales during the pandemic, Target has faced a rough year. Last year, it battled with high inventories that hurt profits. Its product range, full of fun and quick-buy items, isn’t faring well at a time when shoppers are sticking to the basics.

Only 20% of Target's yearly sales come from groceries, while Walmart gets over half its revenue from them.

Target's struggles to attract shoppers during these pricey times have hurt its stock value. By Tuesday's end, its shares had dropped 16% this year while the S&P 500 overall grew by 15%. Target stock hit a year's low of $124.96 on Tuesday, down nearly 50% from pandemic-era highs.