M Macys Inc

Target Corp. said sales at existing stores fell for the first time in more than two years and signaled conditions would remain challenging during the remainder of the year.

The company cut its view for the full year, now forecasting $4.80 to $5.20 in adjusted earnings per share, after saying in May that its original target of $5.20 to $5.40 was still achievable despite weakness in the first half. For the year, Target expects same-store sales to be flat to down 2%.

For the current quarter ending in September, Target expects to earn an adjusted 75 cents to 95 cents a share, compared with the 95 cents analysts have expected.

"Based on the current retail environment, the company believes it is prudent to lower its expectations for comparable sales in the second half of the year," Target said Wednesday. "Although we are planning for a challenging environment in the back half of the year, we believe we have the right strategy to restore traffic and sales growth over time," said Chief Executive Brian Cornell.

During the quarter, sales at existing stores fell 1.1%. Target had warned that sales at stores open at least a year could drop 2% during the quarter, in part because of a dwindling store traffic. Analysts had predicted a 0.9% decline. The fall is the first since April 2014 and worst since the start of 2014.

The retailer isn't alone in reporting softer sales on fewer visits. Apparel giant Macy's last week said it would shut 100 more stores, or 14% of its physical base, as shoppers increasingly opt to make purchases online and spend more on services than on goods. Wal-Mart Stores Inc., meanwhile, reached an agreement to buy web retailer Jet.com Inc. for $3.3 billion.

For Target, digital sales continued to slow during the period, rising 16% versus 23% in the first quarter and just about half the pace logged a year earlier.

In all for the quarter, Target reported a profit of $680 million, or $1.17 a share, down from $753 million, or $1.18 a share, a year earlier. Excluding a loss stemming from early retirement of debt, among other items, per-share profit rose to $1.23 from $1.22.

Revenue slid 7.2% to $16.17 billion.

Analysts projected $1.12 in adjusted earnings per share on $16.18 billion in sales, according to Thomson Reuters.

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

(END) Dow Jones Newswires

August 17, 2016 07:25 ET (11:25 GMT)

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