LONDON (ShareCast) - (Sharecast News) - Target shares were falling sharply in pre-market trade on Tuesday despite the American retail giant posting a stronger-than-expected end to 2024, as the company guided to soft sales in February.
Minneapolis-based Target, which operates from nearly 2,000 stores as well as online, said it expects to grow net sales by around 1% this year, with comparable sales staying flat.

However, it reported a small decline in net sales in February, and noted that a cautious consumer backdrop and "tariff uncertainty" would be "meaningful" pressure on profits in the first quarter.

"During February, we saw record performance around Valentines Day. However, our topline performance for the month was soft, as uncharacteristically cold weather across the U.S. affected apparel sales, and declining consumer confidence impacted our discretionary assortment overall," said Jim Lee, chief financial officer.

Lee said he expected a moderation of this trend beyond the first quarter as the weather picks up, along with support from the Easter holiday shopping season.

"We will continue to monitor these trends and will remain appropriately cautious with our expectations for the year ahead," he said.

Comparable sales in the fourth quarter of 2024 rose 1.5%, helped by strong traffic and digital performance, Target said. Net sales fell 3.1% year-on-year to $30.9bn, but still came in ahead of the $30.8bn expected by the market.

Operating income for the quarter dropped 21.3% to $1.5bn, but earnings per share of $2.41 beat the $2.26 consensus estimate.

For 2024 as a whole, net sales were down 0.8% at $106.6bn and operating income declined 2.5% to $5.6bn.

Shares were 4% lower at $115.88 by 0855 ET.

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