Target profit falls 46% on Canadian costs; trims full-year forecast
Minneapolis — Target Corp.’s third-quarter net income fell 47%, hurt by costs related to its Canadian expansion. Its adjusted profit beat analysts’ estimates, but sales fell short. The retailer lowered its full-year adjusted earnings forecast.
For the three months ended Nov. 2, Target earned $341 million, or 54 cents per share, down from $637 million in the year ago period. Removing Canada-related expansion costs and other items, earnings were 84 cents per share.
Revenue increased 2% to $17.26 billion from $16.93 billion. Wall Street expected $17.38 billion. Same-store sales inched up 0.9%, less than expected.
Target CEO Gregg Steinhafel said the company’s U.S. division performed well despite the fact that "consumer spending remains strained."
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Abercrombie & Fitch swings to Q3 loss on charges, weak sales
New Albany, Ohio — Abercrombie & Fitch Co. swung to a loss in its third quarter, dragged down in part by charges related to the shuttering of its 28 freestanding Gilly Hicks stores. But its adjusted profit topped analysts’ estimates, even as its sales softened.
"Our results for the third quarter reflect weakness in top-line performance, which we expect to continue in the fourth quarter,” said Mike Jeffries, CEO of Abercrombie & Fitch Co. “However, we continue to work hard to offset these conditions and are aggressively pursuing initiatives we believe will improve the sales trend as we go forward.”
For the three months ended Nov. 2, the retailer lost $15.6 million, compared with a profit of $84 million in last year’s third quarter.
Revenue fell 12% to $1.03 billion, from $1.17 billion. Wall Street expected revenue of $1.04 billion.
Total U.S. sales, including online and catalog sales, were down 18% to $674.9 million. Total international sales rose 2% to $358.4 million.
Same-store sales fell 14%. Online and catalog sales comparable sales rose 11%.
Abercrombie will continue to offer Gilly Hicks branded intimate apparel through its Hollister stores and direct-to-consumer business.
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Sears’ loss widens as sales soften at Kmart, Sears
Hoffman Estates, Ill. — Sears Holdings widened its loss in the third quarter as sales decreased at both its Sears and Kmart units.
For the three months ended Nov. 2, Sears lost $534 million, down from a loss of $498 million a year earlier.
Revenue fell 7% to $8.27 billion from $8.86 billion mostly because it had fewer Sears and Kmart stores operating.
Same-store sales dropped 3.1%, and were down 4% at Sears’ stores and declined 2.1% at Kmart stores.
The retailer is in the midst of trying to transform its business, with less emphasis on brick-and-mortar stores. The chain is playing up its Shop Your Way Loyalty (SWY) program, with enhanced membership benefits. Sears is also working on developing digital and social relationships with members.
"We are transitioning from a business that has historically focused on running a store network into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, in home or through digital devices," said Edward S. Lampert, Sears Holdings’ chairman and CEO. "We are driving this transformation by investing in capabilities to enable members access to the broadest possible assortment of products and services, enhancing our membership benefits associated with SYW, developing digital and social relationships with our members, using data and analytics to make targeted offers and decisions delivered in real time and expanding our reach through Marketplace and delivery options."
Dead chains walking.