Forecast Lowered by Target on Slumping Sales

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Target Corp continues to struggle in its attempt to rebound from the hacker attack it suffered last year. The retailer cut its full year forecast as sales continued to slump and said that its push into Canada that has lost money took a toll on its profit.

Target said it now expects its earnings for the full year to be between $3.10 and $3.30 per share, excluding certain items. That estimate is down from a forecast previously released of has high as $3.90.

Analysts predicted per share earnings for the retailer would be $3.44.

The lower outlook follows a preliminary report on earnings from August 5 that was short of Wall Street expectations, signaling the comeback effort by the company will be slow.

Target has struggled to increased traffic in the U.S., repair its expansion in Canadian and to regain the trust in shoppers after it was hacked, and millions of its customers had their data stolen.

Target hired Brian Cornell the former executive with PepsiCo Inc, last month as its CEO, following the May ouster of Gregg Steinhafel.

Target now is relying a great deal on its sales promotions to attract shoppers, but that does not seem to be doing the trick, said an analyst on Wall Street. That means, said the analyst that Target is having its margins squeezed without seeing much benefit.

The analyst added that what they like to see is that the promotion drives more overall traffic to the stores otherwise it turns out to be a double negative.

After the release of the report, shares of Target were down 4.4% to $56.66. Shares have fallen by 6.4% for 2014, through the end of trading on Tuesday, which is worse than its larger rival Wal-Mart.

Target said that its earnings would be between 40 cents and 50 cents per share during the third quarter, excluding certain costs.

That figure misses the estimates made by analysts of 66 cents.

Target’s net income for its second quarter was $234 million equal to 37 cents per share, compared to last year’s $611 million, which was equal to 95 cents per share.

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