Target Retreats From $100B Sales Goal, Keeps Profit Outlook
Target Corporation is reportedly backing off slightly from an ambitious, long-term goal of reaching $100 billion in sales by the end of 2017.
The Minneapolis-based company retreated from its previously announced sales target during a Wednesday meeting with analysts in Toronto, according to media reports.
The change comes as discount retailers nationwide are battling economic conditions and more people are shopping online. “Technology is changing nearly every aspect of our consumer’s lives,” Target CEO Gregg Steinhafel said, according to a Wall Street Journal report.
Steinhafel told analysts that initial sales in Canada “have fallen well short of expectations,” but the company is “very confident in the long-term potential of these assets,” Canadian news outlet Globe and Mail reported.
Challenges in the Canadian market, however, are not responsible for Target backing off its long-term sales goal; the shortfall is instead expected to come from Target’s domestic operations, which are now projected to see around $85 billion in sales by 2017, rather than $94 billion, according to the Wall Street Journal. Canada’s contribution is still expected to be $6 billion.
Target now expects overall U.S. sales to rise 3 percent to 4 percent a year through 2017, instead of 5 percent, the Journal reported.
Target did, however, reiterate its long-term profit goals, saying it expects to generate $8 a share in profit in 2017. Shares of the company’s stock closed up about 2 percent at $65.71 on Wednesday.
Target announced in August that its profit dropped about 13 percent in its second quarter. Steinhafel said at the time that this year’s payroll tax increase continued to negatively affect spending, especially for lower-income households.
Earlier this month, the company laid off 150 employees from its corporate staff in the Twin Cities, and an official told Twin Cities Business that the cuts stem from a shifted focus to digital channels.