Target Corporation (TGT) issued a profit warning on Tuesday, citing the impact of fresh Trump tariffs on its sales. The retailer delivered sales and earnings beats for the fourth quarter but warned that the effects of tariffs will be felt in the first quarter.
In contrast to its rival Walmart (WMT), Target underperformed in terms of sales growth, with margins and sales falling year-over-year during the holiday season. The company also raised inventory by $854 million from last year’s period.
Despite this, Target remains cautiously optimistic, with CEO Brian Cornell hinting that a slow February reflected uncertainty about tariffs. However, the company declined to provide specific first-quarter earnings guidance, citing market volatility.
Analysts are now expecting a decline in earnings, with some cutting their profit estimates and price targets. As a result, Target’s stock has fallen 12% year-to-date and 24% over the past year.
The retailer attributed its sales growth to improved consumer spending on apparel and home goods but warned that discretionary spending remains slow compared to prior years.
Source: https://finance.yahoo.com/news/target-shares-tank-as-it-issues-rough-first-quarter-profit-warning-due-to-trump-tariffs-113033625.html