With bad holiday earnings leading to a poor-preforming quarter four, Target’s future in 2017 is uncertain.
The shares of the big-box retailer Target fell 12 percent during premarket trading on Tuesday morning. The decline has to do with poor Q4 earnings which were because of a consumer turn to digital shopping.
Because of the lower-than-expected earnings at the end of last year, CNBC reported that Target’s share earnings are expected to be a lot lower than expected for 2017:
Target said it expects to earn $3.80 to $4.20 a share in 2017, compared with Wall Street’s expectation of $5.37 a share.
In the same report by CNBC, they also said Target struggled in the fourth quarter because of markdowns as well as the turn to online shopping. It seems that Target needs to rethink their model and start to cater more to the online needs of their consumers.
Target is planning on holding a shareholder meeting sometime Tuesday to discuss financial plans moving forward. With a continually changing market, it’s difficult to predict what’s in the future for Target. The needs of consumers change all the time, and being able to predict that is very difficult.
Hopefully Target’s team can figure out a way to increase their share earnings for 2017 and stay completive with Walmart and Amazon. According to CNBC, Target has been gaining in the online sales department, but slowing down in their stores:
Even as revenue on Target.com shot more than 30 percent higher, the company’s overall same-store sales fell 1.3 percent in November and December.
Hopefully things get better for Target and they continue to grow their online sales and also find a way to boost sales in their brick and mortar locations as well.