Target reported stronger than expected earnings on Wednesday morning, but presented a more downbeat outlook for the rest of the year.
The big box retailer reported adjusted earnings per share of $1.23, well above analyst projections of $1.13. Revenue came in nearly right in line at $16.19 billion against expectations of $16.18 billion. Meanwhile, sales disappointed slightly, falling -1.1% in comparable stores against expectations of just a -1% slide.
The company, however, presented a dour outlook for the rest of the year with guidance down in a number of major categories. Target now expects full year earnings per share of between $4.80 a share and $5.20 per share, down from $5.20 to $5.40 per share originally. For the third quarter the firm projects earnings of $0.75 to $0.95 per share, below analyst expectations of $0.96.
Additionally, the company lowered their projection for second half comparable store sales to be flat to down -2.0% compared to the same time period last year.
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TORONTO, ONTARIO, CANADA - 2016/03/08: Sears store entrance, is an American chain of department stores. Known for selling high quality clothing article from shoes to shirts. (Photo by Roberto Machado Noa/LightRocket via Getty Images)
Macy's Inc. signage is displayed at a department store in New York, U.S., on Monday, Feb. 22, 2016. Macy's Inc., the largest U.S. department-store company, is scheduled to report fourth-quarter 2015 earnings before the opening of U.S. financial markets on February 23. Photographer: Michael Nagle/Bloomberg via Getty Images
J.C. Penney Co. signage is displayed outside of a store at the Gateway Shopping Center in the Brooklyn borough of New York, U.S., on Saturday, Aug. 8, 2015. J.C. Penney Co. is scheduled to release earnings figures on Aug. 14. Photographer: Michael Nagle/Bloomberg via Getty Images
UNITED STATES - JUNE 09: Customers enter the Dillards department store at Parkdale Mall, in Beaumont, Texas, Wednesday morning, June 9, 2004. A judge declared a mistrial in a lawsuit brought against Dillard's Inc. by 17 black shoppers in Texas who claimed that security guards at the department store chain harassed them because of their race. (Photo by Scott Eslinger/Bloomberg via Getty Images)
MIAMI, FL - APRIL 19: A Nordstrom sign is seen outside a store on April 19, 2016 in Miami, Florida. Nordstrom on Monday said in a cost-cutting measure they are expecting to lay off 350 to 400 people. (Photo by Joe Raedle/Getty Images)
The sign outside the Kmart store is seen in Broomfield, Colorado November 19, 2009. Sears Holdings Corp posted a narrower-than-expected quarterly loss November 19, 2009, helped by the first increase in same-store sales at its Kmart unit in four years. REUTERS/Rick Wilking (UNITED STATES BUSINESS)
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"Looking ahead, we remain focused on our enterprise priorities as we continue to see the benefits of investing in Signature Categories, store experience, new flex-format stores and digital capabilities," said Brian Cornell in an earnings release."Although we are planning for a challenging environment in the back half of the year, we believe we have the right strategy to restore traffic and sales growth over time."
Following the news, Target's stock slid just over 5% in pre-market trading to $71.51 per share as of 7:55 a.m. ET.