After a 24% plunge in its third-quarter profit, the jumbo retailer promises to remain 'keenly focused' on offering low prices -- going toe to toe with rival Wal-Mart. Target said it will aggressively cut prices to give consumers bargains during the holiday season, after weak sales of its apparel and home offerings led third-quarter earnings to fall 24%.
The discount retailer also said sales in established stores have been weak so far in November, and if that persists it expects fourth-quarter earnings below analyst expectations.
"The increasing financial challenges and economic uncertainties facing American households continued to pressure our performance during the third quarter," Chief Executive Gregg Steinhafel said during a conference call with analysts.
He also cited higher write-offs in the company's credit card business, where profit fell 83%. Target added $104 million during the quarter to a reserve fund to cover future write-offs as customers have trouble paying their bills.
The company has fared worse than its chief rival, Wal-Mart Stores as consumers cut back on discretionary spending and shop mainly for necessities, since more than 40% of Target's revenue comes from nonessentials such as trendy fashions and housewares.
Last week, Wal-Mart said its third-quarter profit rose 10%, ahead of analyst expectations, as sales increased 7%.