by Anne D’Innocenzio, AP via CNSnews:
Target Corp. cut its profit forecast and a key sales outlook Wednesday as it saw fewer customers in its stores and acknowledged it didn’t push the second part of its “Expect More, Pay Less” slogan.
The Minneapolis-based discounter’s second-quarter net income fell nearly 10 percent, though that was better than what most had expected. Sales at stores open at least a year fell 1.1 percent, reversing seven straight quarters of gains. Its main competitor, Wal-Mart Stores Inc., reports results Thursday.
Target’s shares fell $4.74, or 6 percent, to $70.74 in afternoon trading.
Customer traffic fell for the first time in a year and a half as Target struggled to get its grocery offerings right and shoppers looking for deals on essentials like detergent were turned off. Other issues, both company-specific and industrywide, ranged from a lack of new electronics for sale and lingering disruptions caused by the sale last year of its pharmacy business to CVS.
Sales by markets also varied, with weakness on the East Coast but pockets of strength in California.
“Our No. 1 focus is driving traffic back to our stores and accelerating business to our site,” Chief Executive Brian Cornell said.
Target joins retailers such as department store chain Macy’s that are struggling with fewer customers coming in as shoppers buy more online. The bright spots in retail have been T.J. Maxx’s parent company TJX Cos. and Home Depot as consumers look for clothing bargains and focus more on their homes.
Under Cornell, Target has been trying to reinvigorate itself restore its cheap-chic status after a series of headline-grabbing setbacks such as a 2013 data breach. It’s focusing on categories like fashion, home furnishings and wellness products, creating vignettes featuring home products and launching the children’s line Cat & Jack.
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