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Target Cuts Outlook After December Misses Expectations

Thursday, 05 Jan 2012 10:43 AM

Target Corp. lowered its earnings expectations Thursday after a key revenue figure rose less than expected in December as consumers waited until the last minute to shop and electronics sales were weak.

Revenue at stores open at least a year rose 1 percent. That missed analyst expectations for a 3.1 percent increase, according to Thomson Reuters. Target's stock price fell 4 percent in premarket trading.

Revenue at stores open at least a year is considered a key measure of a retailer's financial health because it excludes stores that open or close during the year.

Strong grocery and beauty product sales offset weakness in electronics and movies, books and music, the company said. In addition, sales and traffic were stronger in the week before Christmas as shoppers waited until the last minute to buy gifts.

December is an important month for retailers because they depend on strong holiday sales to boost annual revenue.

Total revenue for the five weeks ended Dec. 31 rose 2.6 percent to $10.14 billion.

The company now expects fourth-quarter earnings of $1.35 to $1.43 per share. That compares with prior guidance of $1.34 to $1.53 per share. Analysts expect $1.48 per share.

Target, based in Minneapolis, expects revenue in stores open at least a year to rise in the low- to mid-single digit percentage range.

Shares fell $2.20, or 4.4 percent, to $47.80 during premarket trading.

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2012-43-05
Thursday, 05 Jan 2012 10:43 AM
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