Weak store performance and a slow start to the holiday season led to a 4.9 percent decline in total sales for Target during the critical November and December period.
The No. 2 discount chain said same-store sales slipped more than 3 percent for the two months, while combined in-store and online CE comps cratered, falling by the high single digits.
Chairman/CEO Brian Cornell said holiday performance was softer than expected, and pointed to “disappointing traffic and sales trends in our stores,” where same-store transactions declined 1.7 percent.
In contrast, online performance outpaced the industry, Cornell said, with comps and transactions growing more than 30 percent, and sales up more than 40 percent in December.
Total sales were also impacted by the absence of Target’s pharmacy and clinic businesses, which were sold off in December 2015.
Cornell said the “highly promotional competitive environment” and the cost of the company’s accelerated shift to digital — including investments in supply chain and technology — will negatively impact its fourth-quarter margins and earnings. The chain also lowered its Q4 comp sales guidance.
Target’s fourth-quarter and full-year results will be released on Feb. 28.