by Brian Lipton
Target’s Martinsburg, VA location

Shares of Minneapolis-based retail giant Target plunged nearly 9 percent in early morning trading after the company adjusted its fourth quarter and fiscal year estimates.

Target expects fourth-quarter 2017 comparable sales growth of flat to 2 percent. That performance would translate into full-year 2017 comparable sales growth of flat to 1 percent. In addition, Target now expects GAAP EPS from continuing operations and adjusted EPS of $1.05 to $1.25 for the quarter, while for full-year 2017, it now expects GAAP EPS from continuing operations of $4.38 to $4.58 and Adjusted EPS of $4.40 to $4.60, compared with prior guidance of $4.35 to $4.55 for GAAP EPS from continuing operations and $4.34 to $4.54 for Adjusted EPS.

The fiscal year news comes a week after reports surfaced that the retailer would close 12 under-performing locations throughout the country in February 2018.

On the brighter side, the company’s third-quarter results included a 1.4 percent increase in sales to $16.7 billion and a comparable sales increase of 0.9 percent. Comparable digital channel sales grew 24 percent and contributed 0.8 percentage points to comparable sales growth.

While GAAP earnings per share (EPS) from continuing operations were $0.87, which beat some analysts’ estimates, it was still a decrease of 17.7 percent from third quarter 2016; meanwhile, third quarter adjusted earnings per share from continuing operations (Adjusted EPS) were $0.91, a decrease of 13.1 percent from third quarter 2016.

“We’re very pleased with Target’s third quarter performance, including traffic and sales growth that demonstrate we’re building on the progress we saw in the first half of the year,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “The investments we’re making in our business will help Target drive long-term success and ensure we’re well positioned to deliver for guests in the all-important holiday season. Guests this holiday season will experience elevated in-store service reflecting our investments in wages, training and additional hours for our team, and they’ll find more value than ever before through a combination of being priced right daily and offering impressive deals. While we expect the fourth-quarter environment to be highly competitive, we are very confident in our holiday season plans.”