Target Corp. said on Tuesday that third-quarter profit missed estimates as investments in its online business, higher wages and price cuts hurt margins and a big jump in inventory ahead of the critical holiday season worried investors.

Target shares (TGT) tumbled as much as 15 percent as the retailer also reported that comparable sales missed expectations.

The third-quarter performance was in sharp contrast to rivals Walmart Inc and Macy's Inc, which raised their forecasts for the current year as a strong economy boosted consumer spending.

Addressing the margin pressures, Chief Executive Officer Brian Cornell reiterated on a conference call that its efforts to boost growth "involves a commitment of resources, which explains why I've already used the word investment five times in these remarks."

Target expects to deliver a strong holiday performance by expanding its toy department in more than 500 stores, offering two-day free shipping with no minimum purchases on thousands of items and accelerating the pace of store remodels.

Target expects same-store sales to rise about 5 percent in the final quarter, signaling a slowdown during the most critical time of the year for retailers even though it was above estimates of 4.8 percent. For the latest quarter sales rose 5.1 percent.

Excluding items, Target earned $1.09 per share in the quarter, below the average estimate of $1.12.

Gross margins were 28.7 percent, falling short of the estimate of 29.55 percent.

Inventories were up 18 percent from a year ago as the retailer prepared for increased holiday spending.

Sales in the quarter totaled $17.59 billion, below the average estimate of $17.8 billion.

Online sales soared 49 percent, outpacing the 41 percent rise in the second quarter and a 28 percent gain in the first. Target is offering free two-day shipping on many items through Dec. 22 with no minimum order or membership required.

The Minneapolis-based retailer said it gained market share in all key product categories and customer traffic rose 5.3 percent.

It was still confident of its earlier full-year adjusted earnings outlook of $5.30 to $5.50 per share versus the Wall Street view of $5.41, according to IBES Refinitiv.

Target shares slid 8.6 percent to $70.50 after falling as low as $66.12.