Target Misses Forecasts as profits slips

Target Misses Forecasts as profits slips - Same-store...

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Target Misses Forecasts as Profits Slips Target is a discount retail store that sells everything from home appliances to food, clothing, and electronics. The Target Corporation said on November 15 th , 2007, that their third quarter earnings for the year were down 4 percent, which did not meet expectations. Target attributes the weak sales their to high-margin categories such as clothing and home furnishing. Because of this fall in earnings the Target stocks have moved down from $51.69 to $50.25. The stocks fell 4.1%, the lowest for the entire year of 2007. Target Chair and Chief Executive officer Bob Ulrich is blaming low profit during the third quarter to the lack of sales of their more expensive items, such as furniture, which led to lower sales all around the company. Luckily for the Target Corporation, their same-store sales were up 3.7 percent.
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Unformatted text preview: Same-store sales, or sales at stores open at least a year, are key indicators of retail performance because they measure growth at existing stores rather than newly opened ones. Because of these same-store sales, most board members are predicting an increase in profits for the fourth quarter, but there will be little price change in earnings per share. Target has decided to repurchase many of their stocks from customers by the end of 2008. In doing so, Target Corporation hopes that more money will be returned to the stockholders and increase the value of the shares. By taking the more aggressive route, the Target Corporation is optimistic that revenues will increase and there will be growth in the sales of higher margin goods....
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