Target’s stock fell Thursday morning after it announced a third-quarter 46 percent drop in profits and lowered its earnings outlook for the fourth quarter.
 
The Minneapolis-based retailer’s stock dropped nearly 4 percent in premarket trading Thursday after the company amended its full-year earnings forecast, lowering its expectation from a range of $4.70 to $4.90 a share to a range of $4.59 to $4.69 a share.
 
For the fourth quarter, Target outlined the same challenges recently cited by Richfield-based Best Buy: The need to lower prices and increase promotions during the highly competitive holiday season. Target, like Wal-Mart and Best Buy, is opening its doors Thanksgiving night this year, ahead of “Black Friday.”
 
Target announced that net earnings for the third quarter, which ended November 2, totaled $341 million, or $0.54 per share, down 46 percent from $637 million, or $0.96 per share, during the same period in 2012. Earnings per share were $0.07 lower than what analysts polled by Thomson Reuters had expected.

 
Revenue, meanwhile, totaled $17.3 billion, up 4 percent from $16.6 billion in the third quarter of 2012. Third-quarter revenue fell short of analysts’ projections of $17.4 billion.
 
“Target’s third-quarter financial results reflect continued strong execution in our U.S. segment in an environment where consumer spending remains constrained,” President and CEO Gregg Steinhafel said in a statement.
 
Target said its third-quarter earnings were below expectations due mainly to losses related to its Canadian expansion. Target opened 32 stores in the third quarter, 23 of which were in Canada.
 
Target’s third-quarter profits were hit with a loss of $0.29 per share from its Canadian segment. Excluding that impact, the company would have seen earnings of $0.84, which would be 6 percent lower than last year, as opposed to 46 percent lower.
 
For the company’s U.S. operations, sales increased by 2 percent to $16.9 billion, and “same-store” sales—those at stores open at least a year—improved by about 1 percent.
 
The company is still confident in its Canadian expansion, however, and said it remains on track to have 124 Canadian stores by the end of the year.
 
Shares of Target’s stock had improved slightly since the early morning and were trading down about 3.5 percent at $64.16 late Thursday morning.
 
Target has 1,919 stores—1,797 in the United States and 122 in Canada.