Target profit drops 47% after Canadian launch
Company blames underwhelming response by Canadian consumers
Third-quarter earnings at discount retailer Target dropped by almost half as the company blamed underwhelming results after their much ballyhooed Canadian launch.
The discount chic chain said third quarter net income dropped 47 per cent, with the company citing costs related to its expansion into Canada earlier this year.
The company earned $341 million US or 54 cents per share. That's down from $637 million, or 96 cents per share, a year earlier. Revenue was up two per cent to $17.26 billion from $16.93 billion.
The profit drop was not as bad as what analysts were expecting, but the revenue number was not as high as hoped.
The retailer's launch in Canada earlier this year followed months of anticipation as shoppers north of the border eagerly awaited Target's arrival, but that goodwill dissipated somewhat as customers complained of empty shelves and higher prices than in the U.S.
The company said in August that cautious consumers and costs associated with the ramp up of its Canadian expansion would likely lead to weaker results for the remainder of the year, but said it was committed to Canada and was adjusting and refining operations as it learned from past experience and prepared to open another 56 stores by the end of the year.
If Canadian operations are removed from the equation, the company's quarterly profit would have been 84 cents a share.