By Colin Kellaher

Shares of Target Corp. fell sharply in premarket trading Wednesday after the retailer posted a quarterly results that fell well short of Wall Street's expectations and sounded a cautious note on the critical holiday shopping season amid a softening consumer environment.

The Minneapolis company reported net income of $712 million, or $1.54 a share, for its fiscal third quarter ended Oct. 29, down from $1.49 billion, or $3.04 a share, a year earlier.

Analysts polled by FactSet, on average, had been expecting earnings of $2.16 a share.

Sales rose 3.3% to $26.12 billion, shy of the $26.4 billion Wall Street had been looking for, while comparable sales rose 2.7%, beating expectations for a gain of 2.2%.

Target said sales and profit trends softened meaningfully toward the end of the quarter, as inflation, rising interest rates and economic uncertainty weighed on shopper behavior.

The retailer said the negative trends have persisted into November, and that it is now planning for a wide range of sales outcomes in the fourth quarter, centered around a low-single-digit decline in comparable sales and an operating margin rate of about 3%.

Wall Street has penciled in a same-store sales gain of 3.1% for the fourth quarter, which includes the holiday selling season.

Target shares, which closed Tuesday at $178.98, were recently down more than 12% to $157.40 in premarket trading.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

November 16, 2022 06:55 ET (11:55 GMT)

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