Target forecasts gloomy second-quarter as consumers turn cautious

Target Corp (TGT.N) on Wednesday forecast profit below Wall Street expectations and estimated a drop in sales for the second quarter, as consumers pinched by persistently higher prices shun buying non-essentials such as electronics and home goods.

Shares of the big-box retailer fell about 3% in premarket trading on Wednesday, while bigger rival Walmart’s (WMT.N) stock was down about 1%.

Target projected adjusted profit between $1.30 and $1.70 per share, below estimates of $1.93 for the current quarter.

It forecast comparable sales to decline in the low-single digits, compared to estimates of a 0.25% rise, according to Refinitiv data.

“Right now (the American consumer is) spending more due to inflation, saving less and delaying major purchases,” Chief Growth Officer Christina Hennington said in a media call.

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