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Target tumbles 20% after its sales and earnings fall short. Here’s what went wrong.
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.
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Trump demands immediate dismissal of New York “hush money” criminal case
President-elect Donald Trump’s criminal conviction should be tossed out because he was elected president, his lawyers say.
In a filing Wednesday, defense attorneys Todd Blanche and Emil Bove — both slated to take on senior roles under Trump in the federal Department of Justice — wrote to the judge who presided over Trump’s criminal trial that his conviction must be set aside.
“Immediate dismissal of this case is mandated by the federal Constitution, the Presidential Transition Act of 1963, and the interests of justice, in order to facilitate the orderly transition of Executive power following President Trump’s overwhelming victory in the 2024 Presidential election,” Blanche and Bove wrote.
Trump was convicted in May of 34 counts of falsifying business records in connection with a coverup of a “hush money” payment made before his first election to office in 2016. But he has not been sentenced. That crucial hearing was postponed twice: first to allow his team to seek dismissal based on a July Supreme Court presidential immunity decision, and later to avoid interrupting the campaign for president.
Now that Trump has won the election, his attorneys are arguing that means he can’t be punished for his crimes, even before he takes office.
“Just as a sitting President is completely immune from any criminal process, so too is President Trump as President-elect,” they wrote. “Federal law provides for the ‘orderly transfer of Executive powers in connection with the expiration of the term of office of a President and the inauguration of a new President.'”
Trump’s lawyers had previously indicated in letters to the Justice Juan Merchan and Manhattan District Attorney Alvin Bragg that they intended to pursue this latest dismissal of his case. On Tuesday, prosecutors wrote to the judge to say while they won’t oppose postponing sentencing — potentially even until after Trump’s term in office is complete in 2029 — they do intend to fight dismissal of the case.
“Consideration must be given to various non-dismissal options that may address any concerns raised by the pendency of a post-trial criminal proceeding during the presidency, such as deferral of all remaining criminal proceedings until after the end of defendant’s upcoming presidential term,” prosecutors wrote.
Immediately after a unanimous jury found Trump guilty in May, he swore he’d fight the conviction.
The jury found that Trump committed 34 felonies as part of a plan he signed off on, in which a series of reimbursements to Michael Cohen, his former attorney and fixer, were portrayed as payments for legal services. They were in fact repayments for a $130,000 wire payment Cohen made to the lawyer of an adult film star days before the 2016 presidential election. The payment was made so that the actress, Stormy Daniels, would refrain from going public about an alleged sexual encounter with Trump just before voters were heading to the polls.
Trump entered a not guilty plea in the case, denies any wrongdoing and says he never had sex with Daniels.
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