Target offered disappointing third-quarter earnings results Wednesday, Nov. 20, as it looks ahead to the holiday shopping season. After lowering prices on thousands of items in recent months to lure shoppers, it has now lowered its expectations for the year.
This was in contrast to Walmart, which raised its annual forecast just 24 hours earlier. Target’s move comes after earlier this year, it too had raised profit estimates for 2024, citing the success of those price cuts. But with other factors in the mix, it was not enough for the retailer to keep that positive outlook.
Target executives point to customers still wary of inflation and costs affiliated with the dock workers’ strike impacting the company’s profits. Comparable sales, meaning results from stores and digital channels operating for at least 12 months, rose 0.3%, which was below analysts’ expectations of 1.5%.
Despite the lackluster numbers, CEO Brian Cornell said the company remains focused on its holiday merchandising and marketing plans.
“And while we’re really excited about them, we’re also focused on controlling what we can control and planning the business cautiously given the volatility we’ve been seeing,” Cornell said during Wednesday’s morning earnings call. “While we aren’t happy about the reduction in our outlook for the remainder of the year, we believe we’re managing our business appropriately and we’re helping the team stay agile and ready to respond if we see our business accelerate.”
While Target is looking to hit the mark heading into 2025, Walmart is riding high with third-quarter sales at stores open for at least a year growing by 5.3% compared to last year.
Target is hoping for some of that momentum as it adds more subscribers to its Target Circle 360 membership program and continues to slash prices, including on holiday items like its $20 Thanksgiving meal bundle for four people, which is $5 cheaper than last year.
