Target Corporation witnessed a worse-than-expected deceleration in its Q2 comps, driven by fewer transactions as well as lower units per transactions. The company’s store traffic would likely continue to be challenging, Argus’s Christopher Graja said in a report. He maintained a Hold rating on Target, while reducing earnings estimates.
Target reported a 1.1 percent decline in its Q2 comps, worse than the Street’s estimate of a 0.7 percent decline. The number of transactions was down 2.2 percent, while units per transaction declined by 1.5 percent.
Analyst Graja reduced the EPS estimates for Q3, Q4 and FY17 from $0.99 to $0.88, from $1.73 to $1.61 and from $5.15 to $5.00, respectively.
“The primary driver of these reductions is a more cautious sales outlook as store traffic continues to be a problem. Additional issues are price deflation in the food department, very weak sales of electronics and the need to drive business in the health/over-the-counter department,” Graja elaborated.
Read more at Benzinga