Target's expansion in the Great White North has chilled its third-quarter performance.
The Associated Press reports that Target's third-quarter net income dropped 47 percent. Thee decline is blamed on its expansion in Canada.
The Minneapolis discounter also lowered its full-year adjusted earnings forecast. For the three months ending Nov. 2, Target earned $341 million, or 54 cents per share. That's down from $637 million, or 96 cents per share, a year earlier. Analysts expected earnings of 64 cents per share. The Star Tribune notes that when Canada-related expansion costs and other items were removed, earnings were 84 cents per share.
A story in Canada's Financial Post said that Target's Canadian sales fell "well below initial expectations." In a recent meeting with analysts in Toronto, Target executives admitted they face an uphill battle in trying to change consumers’ longstanding shopping habits.
Target's press release included a positive spin on the earnings news, with a quote from president and CEO Gregg Steinhafel. He said the company is prepared for the crucial fourth quarter. “We are intently focused on delivering outstanding merchandise, an easy, fun shopping experience and an unbeatable combination of everyday low prices, weekly ad discounts, 5% REDcard Rewards and price match policies throughout the U.S. and Canada."
Target's results come after rival Wal-Mart last week cut its annual outlook for the second time in three months and gave fourth-quarter guidance that's below Wall Street's expectations.