REUTERS: Target Corp said on Wednesday it missed its own expectations for holiday season sales, citing weak demand for toys and electronics for growth of just 1.4per cent and dragging shares across the retail sector lower.
The industry bellwether's strategy of improved merchandise, loyalty program, store layout, which resulted in three strong quarters this year and a record-breaking 2018 holiday period, fell short during the shorter-than-usual holiday season.
Comparable sales growth a year ago was 5.7per cent.
"While we knew this season was going be challenging, it was even more challenging than we expected," Chief Executive Officer Brian Cornell said.
"A tough miss considering how hard our team worked all season long."
The numbers come just a week after several U.S. retailers including Kohl's , J.C. Penney and Macy's reported lower sales for the key shopping period, raising doubts about the broader health of the retail sector.
Target's shares, which nearly doubled in 2019, fell 8per cent before the bell, while shares of the world's biggest retailer, Walmart Inc , slipped 2per cent.
Target said lower sales in categories such as toys, electronics and home products, which typically account for a higher portion of sales during the holidays, had a greater impact on overall sales growth.
Still, apparel, beauty, food and beverage were some of the bright spots, the company said.
Digital sales during the November-December period grew 19per cent compared with 2018's 29per cent rise.
The company now expects its fourth-quarter same-store sales to be in line with its holiday period growth of 1.4per cent, down from its prior range of a 3per cent to 4per cent growth. It maintained its forecast for full-year profit.
Analysts have projected quarterly comparable sales growth of 3.8per cent, according to IBES data from Refinitiv.
(Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli)