Target is heading into the holiday season with a gloomy outlook, with the retailer reporting its sales and profit fell short of analysts’ expectations and lowering its earnings forecast for the current quarter. Its shares tumbled almost 20% in pre-market trading. 

Shares of Target tumbled $28.78, or 18.5%, to $127.22 in premarket trading. 

The retail chain said its third-quarter sales rose 1.1% to $25.7 billion, while net income dropped 12% to $854 million, or $1.85 per share. Analysts had forecast sales of $25.9 billion and per-share earnings of $2.30, according to analysts surveyed by FactSet. 

Target is struggling to gain traction with inflation-weary consumers, with many seeking bargains or refocusing on essential items, said Neil Saunders, an analyst with GlobalData. The retailer’s struggles in the most recent quarter and its lowering of its forecast for the current quarter may not bode well for its holiday season, he added.

“Sales have virtually flatlined and have done so against the backdrop of a very poor prior year,” Saunders said in a Wednesday research note. “And this has occurred during a quarter when multiple banner events — among them, back to school, Halloween, and deal weeks and days — should have helped to drive spending.”

On a conference call with investors, Target CEO Brian Cornell noted that shoppers have been cautious with their purchases. 

“Consumers tell us their budgets remain stretched, and they are shopping carefully,” Cornell said on the call. Consumers are “focusing on deals, and stocking up when they find them.”

Target’s results contrast with its rival Walmart, which this week reported another quarter of stellar sales and offered a rosy outlook.

contributed to this report.