PHOTO PHOTO: A Target logo is seen outside one of its stores in Burnaby, British Columbia, January 15, 2015. TREUTERS / Ben Nelms
(Reuters) – Target Corp ( TGT.N ) reported the result for the third quarter and comparable sales in calculations on Tuesday at a time when a strong economy has increased consumer spending at rival retailers and reduced their shares by 7 percent in premarket trading.
Sales in stores open at least one year increased by 5.1
percent, analysts’ estimates of 5.21 percent, according to IBES data from Refinitive.
The results missed expectations such as price cuts, higher wages and investments in their online business to margins. Excluding items earned Target $ 1.09 per share in the quarter, below average estimate of $ 1.12 per share.
The retailer was convinced that it could reach its previous full-year forecasts, hoping that the investments will help compete against online behemoth Amazon.com Inc. ( AMZN.O ) and bricks like Walmart Inc ( WMT .N ) during the key holiday period.
Target will offer free two day shipping on hundreds of thousands of goods through 22 Dec, without the minimum order or membership required.
Sales rose to $ 17.59 billion, below average estimate of $ 17.8 billion.
The third quarter results come after it reported its best comparable sales growth for 13 years in the second quarter.
Target shares fell 7.1 percent to $ 72.25 in premarket trading.
Reporting of Nandita Bose in New York; Editing Jeffrey Benkoe
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