Minneapolis, MN – Target announced very weak earnings in the last quarter, as well as a pessimistic outlook going into 2017, causing its stock price to fall 13 percent.
The retailing giant said its profit fell by 43 percent during the most recent quarter. Its estimates for the coming year were well below the expectations of industry experts.
As a result Target’s stock price fell nearly nine dollars Tuesday, and fell almost another dollar on Wednesday. Its closing stock price Wednesday of $57.83 is the lowest since August 7, 2014.
Target’s stock price has now tumbled more than $26, or 31 percent, from its peak of $83.98 on April 19 of last year. On that date Target announced they would be pursuing a policy allowing transgender customers to use the bathroom of the gender they identify with, rather than their biological gender. That announcement spurred boycotts and protests of the retailer.
“I don’t think this fall in stock price was necessarily due to the boycott; it was a reaction to Target’s latest earnings release and forecast, which were very disappointing,” said Andy Winton, chair of the Finance Department at the University of Minnesota’s Carlson School of Business, “Of course, the poor outlook might be due in part to the boycott, but I don’t have a good sense of that.”
Target’s stock price has fallen nearly $20 alone since the beginning of December with a poor showing in sales during the holiday season. Since then Target has canceled major development projects including a so called “Store of the Future.”
In response Target announced Tuesday that it will be cutting prices, updating stores, opening smaller locations near college campuses, and launching a dozen new brands. The company is hoping these moves can add $10 billion in sales over the next two years.
“Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores,” Brian Cornell, chairman and CEO of Target wrote in a press release.
Many other retailers have been hit in recent quarters as more customers flock to online retailers like Amazon, reports MPR. Competitor Wal-Mart however, posted another quarter of higher customer traffic and same-store sales.