Target misses forecasts, cuts guidance
By Abigail Townsend
Date: Wednesday 21 May 2025
(Sharecast News) - Target cut its full-year guidance on Wednesday, weighing on the shares, after the US retail giant missed first-quarter forecasts.
The big box retailer said net sales fell 2.8% in three months to 3 May to $23.85bn, below the $24.27bn Wall Street was expecting.
Comparable sales were 3.8% lower, while the average amount customers spent during online and in-store visits decreased 1.4%.
Adjusted EPS, which strips out gains from a litigation settlement, fell to $1.30 from $2.35, below the $1.61 expected.
Brian Cornell, chief executive, said the trading environment during the first quarter had been "highly challenging".
He blamed Target's performance on weakened consumer sentiment and the impact of Donald Trump's tariff regime.
"I want to be clear that we're not satisfied with these results," he told reporters.
Looking to the rest the year, Target cut sales and profits goals and unveiled an "enterprise acceleration office" to help improve operations.
It also confirmed that chief legal and compliance officer Amy Tu, and chief strategy and growth officer Christina Henningon, were leaving the company.
Target now expects a low single-digit decline in sales, with earnings per share between $8.00 and $10.00.
Adjusted EPS was forecast to be in the range of $7.00 and $9.00.
It previously predicted net sales growth of around 1% and adjusted EPS in the range of $8.80 to $9.80.
The shares were down 3% in pre-market trading as at 1300 BST.
In common with others in the sector, Target is extremely vulnerable to tariffs, with around 30% of its in-house brands produced in China. Last week, Walmart maintained its forecasts but warned it might have to raise prices in response to the higher import duties.
Cornell told reporters that increasing prices would be "the very last resort" but would ultimately depend on ongoing efforts to source more products from the US.
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