AMZN Amazon.com Inc

Slower digital sales growth at Target Corp. weighed on the retailer's first-quarter results, the latest sign that retailers' ability to grab online shoppers is increasingly determining their fortunes.

Chief Executive Brian Cornell cited "an increasingly volatile consumer environment" for a 5.4% decline in total sales and said Target's view of second-quarter results "has been tempered by the recent slowdown in consumer trends."

Shares of the company declined 9% to $67 in premarket trading.

The company forecast second-quarter adjusted earnings of $1 to $1.20 a share, below analysts' expectations of $1.36 a share. It said it expects same-store sales that are flat to down 2%.

In the first quarter, digital sales rose 23%, down from a 38% clip a year earlier. Online sales represented 3.5% of Target's top line, a smaller chunk than the 5% achieved in the December period though up from 2.8% a year earlier.

The company has been spending aggressively to beef up digital sales, in a retail environment where foot traffic is dwindling and more Americans are making purchases at Amazon.com and other online retailers.

Over all, the Minneapolis company reported a profit of $632 million, down from $635 million a year earlier. On a per-share basis, earnings rose to $1.02 from $1.01 thanks to a lower share count,

Excluding items such as losses on early debt retirements and divestiture costs, adjusted per-share profit rose to $1.29, above the company's forecast of $1.15 to $1.25.

Revenue declined 5.4% to $16.2 billion. Analysts had projected $16.3 billion in revenue, according to Thomson Reuters.

Sales at existing stores rose 1.2%, short of Target's 1.5% to 2.5% annual target. The company had said it expected same-store sales to come in at the low end of that range.

Last week, disappointing results from department stores like Macy's and Nordstrom illustrated shoppers' shift away from brick-and-mortar stores and sparked widespread stock declines across the retail sector.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

May 18, 2016 08:25 ET (12:25 GMT)

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