Hey there, time traveller!
This article was published 21/11/2013 (1043 days ago), so information in it may no longer be current.
NEW YORK -- Target Corp. is getting the cold shoulder in Canada.
The discount retailer, which opened stores in Canada in March, posted third-quarter profit results Thursday that trailed analysts' estimates after the loss in its Canadian unit was wider than expected.
Target is generating lower-than-projected sales after failing to provide Canadians with the bargains they were expecting. Rivals have cut prices to make Target's entry difficult, and Canadians aren't shopping at the stores for basics such as food and medicines, like U.S. shoppers.
Canadian sales troubles and the costs of opening 124 stores this year cut 29 cents a share from third-quarter profit, Target said Thursday. That was seven cents worse than forecast, accounting for almost all of the gap between the retailer's results and analysts' estimates.
"They had high expectations when they moved to Canada, and they're nowhere close to hitting those targets," said Brian Yarbrough, an analyst at Edward Jones & Co.
The Canadian unit, which added 23 stores in the quarter, generated $333 million in sales in the quarter ended Nov. 2 and posted a $238-million loss before interest and taxes, Target said Thursday in a statement.
The Canadian woes are especially troublesome for Target because it's the retailer's only market outside of the United States, where it has almost 1,800 stores. By contrast, larger rival Wal-Mart has locations in 27 countries, so it can make up for weakness in one market with strength in others.
In Canada, Target is finding many consumers who had crossed the border to shop at U.S. locations have been dismayed at the price of merchandise at Canadian locations.
"While our initial sales and profits in Canada have not met our expectations, we remain enthusiastic about the Canadian market and confident in the long-term success of these stores," Chief Executive Officer Gregg Steinhafel said Thursday on a conference call with analysts.
-- Bloomberg News