Target (NYSE: TGT) generally is not in the spot of releasing depressing news, but it does happen occasionally. The Wal-Mart (NYSE: WMT) competitor, who is flashier and trendier despite selling much of the same merchandise (but marketed much better) said this week holiday shopping began slower than it had expected, and that Q4 profits might fall "well short" of analyst expectations.Them's fightin' words, and as such, Target shares slid about 7% on the news yesterday. Target shares, which closed above $60 Wednesday, saw a slip to below $54 yesterday and has recovered a bit to over $55 this morning. Is this the end? Of course not, but when a holier-than-thou retailer with a rosy amount of Wall Street cred announces a downfall in guidance and disappointing holiday sales (at least, at the start), things are sure to happen. And happen they did.
Although Target execs said that sales the two days after Thanksgiving met its expectations, sales during the final week of November were soft in hot holiday categories such as toys, holiday merchandise and home and apparel goods. In addition, same-store sales rose just 1.1% when adjusted for an unusual full week that existed this year after Thanksgiving. Are customers really pulling back on holiday spending this year as Target's results would seem to indicate? Outside of the Black Friday and Cyber Monday shopping days, maybe that's the case. We won't know real details until December's conclusion, though.
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Reader Comments (Page 1 of 1)
12-13-2007 @ 12:28PM
CJN said...
Target's problem is that they don't carry any stock! They advertise sales on Sundays, and if you don't get to the store on Sunday, the sale items are GONE. (Sometimes they're gone even if you DO get there on Sunday.) This has alienated me, as both a shopper and a (former) stock holder. They are currently out (both in stores and on line) of EVERYTHING that my kids want, and this is not the first Christmas that I have experienced this. I, for one, am finished with them.