Stung by unusually warm weather and shaky consumer spending, Target Corp. (NYSE: TGT) today reported worse-than-expected quarterly earnings and announced a $10 billion buyback.

Third-quarter net income fell to $483 million, or 56 cents a share, from $506 million, or 59 cents a share, a year earlier, trailing the 62-cents expected by analysts, according to Thomson Financial. Revenue rose 9.3% to $14.83 billion, in-line with consensus forecasts.

"Our third quarter earnings were disappointing due to soft sales in our higher margin categories, leading to lower-than-expected gross margin in our core retail operations," said Bob Ulrich, chairman and chief executive officer, in the earnings release. "However, we have not observed any meaningful change in the intensity of the competitive environment and continue to believe that we are well-positioned to operate in a variety of sales environments going forward."

These results are in contrast with Wal-Mart Stores Inc. (NYSE: WMT), which last week reported a strong quarter and gave bullish guidance. Nonetheless, the bar had been set pretty low for Wal-Mart. Shares of Target, down 7.4% for the year, are trading down in pre-market trading.

Unless the retailers have a really strong holiday season, the rest of the year is going to be tough.