Target Stock Plunges After Weak Earnings Report Ahead of Holiday Season

Target rattled Wall Street on Wednesday with a downbeat earnings report showing a sales decline, lower profit and an unwelcome buildup of unsold inventory. The company also cut its forecast for the full year, a bad omen ahead of the critical holiday shopping season.

Target’s stock plunged more than 20 percent, putting it on track for one of its biggest daily declines on record, behind another ugly earnings day in mid-2022 and “Black Monday” in October 1987.

Sales at Target stores last quarter fell 1.9 percent from the same period last year, offset somewhat by a 10.8 percent rise in online sales. The company said it expected sales to be flat this quarter and cut its forecast for full-year profit, almost entirely reversing an increase announced just three months ago.

Jim Lee, Target’s chief financial officer, told analysts on a call that it was “prudent to take this conservative approach” and that the company would take “swift and disciplined action to position ourselves to win during the holidays and in 2025.”

Target had recently made improvements that drew shoppers to its stores, but the earnings setback suggests that there is more work to do. Brian Cornell, Target’s chief executive, said in a statement that the retailer was navigating through “a volatile operating environment.”

The weaker-than-expected report covered the period of back-to-school shopping and Halloween, which can signal more challenges during the crucial final weeks of the year. Retailers look to those seasonal events as indicators of how shoppers might spend around Thanksgiving and Christmas.