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Target again reduces sales forecast
For the second month in a row, Target Corp. has cut its monthly sales outlook.
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For the second month in a row, Target Corp. has cut its monthly sales outlook.
The Minneapolis-based retailer predicted Monday that October sales at stores open more than a year would rise 2 to 4 percent, down from its 3 to 5 percent forecast earlier this month.
Target, the nation's second- largest discount retail chain, attributed the dampening forecast to "greater-than-normal daily volatility and continued disappointing sales" in the first two weeks of October. In a recorded phone call after the market closed, Target said it didn't expect the outlook to change during the remaining two weeks of the month.
Actual sales will be reported on Nov. 8.
In September, Target had forecast same-store sales growth of 4 to 6 percent, but it downgraded expectations significantly mid-month to a 1.5 to 2.5 percent gain. Actual results: a 1.2 percent increase.
October's reduced forecast doesn't bode well going into the important holiday season. Faced with the worst housing slump in more than 15 years, as well as higher food and fuel costs, consumers are cutting back on discretionary spending, said Love Goel of Growth Venture, a private equity firm in Minnetonka focused on the retail sector.
"It's purely the softening of the economy," he said. "We're seeing it across the board at a wide variety of retailers, not just general merchandisers like Target." Target closed at $61.55, but fell 50 cents in after-hours trading.
JACKIE CROSBY
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