Target shares went down after the company reported its first-quarter earnings on Wednesday. The retailer missed the expectations on the top and bottom lines, which the company blamed on the poor spring weather.
Meanwhile, other retailers such as Home Depot, J.C. Penny, and Lowe’s blamed the weather with their poor quarterly results.
According to them, the slow start of spring has delayed the purchases of items like patio furniture, grills, and gardening gear. However, Target said that the sales of the non-seasonal products such as food and beverages helped the retailer to buffer the impact of the weather.
Target stated that they would get back what they have lost once the weather improved.
“Strong sales growth in our home, essentials and food & beverage categories offset the impact of delayed sales in temperature-sensitive categories, which accelerated rapidly in recent weeks as weather improved across the country,” said Brian Cornell, CEO of Target.
However, the performance of the retailer will still rattle investors who have been eyeing the efforts of Target to reinvent its business. The company has been focusing on new, smaller format stores, a push into private-label brands, and improving its delivery capabilities.
Meanwhile, the shares of the retailer fell about 5 percent in premarket trading.
Target is also offering a wide range of expectations for second-quarter adjusted earnings per share, stating that it ranges between $1.30 and $1.50.
“We applaud Target for putting long-term success ahead of short-term gains. However, it does underline that continued effort is needed to drive top-line growth — especially as the company starts to lap tougher prior year comparatives,” the managing director of GlobalData Retail, Neil Saunders, said.
Target to Reinvest More than $7B by 2020
In other news, Target is pushing through with its plan to reinvest more than $7 billion back into the company through 2020.
The remodel stores of Target will have more fresh food, produce and prepared options for customers who are in hurry. Target shoppers increased 3.7 percent during the quarter, which is considered as it strongest performance for the past 10 years.
“I’ve talked about the importance of traffic as a true indicator of the health of our business and the guest reaction to our key strategic initiatives,” stated Cornell.
“So they’re all coming together well. I think the guest is reacting to our new remodels to the new brands to our new fulfillment options to what we’re doing from a digital standpoint.”
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