Target Corp. gave a lukewarm outlook for its profit this year — a sign the retail giant sees some challenges mounting as uncertainty reigns about the impact of the coronavirus outbreak. The shares fell in early trading.

• Excluding some items, earnings per share this fiscal year will be US$6.70 to US$7, the midpoint of which is below analysts’ average estimate of US$6.94. Comparable sales for the full year will increase in the low-single digits this year, Target said.

Key Insights

• Target had previously reported disappointing holiday sales, so investors are focused on whether the cheap-chic retailer can get back on track in the current year.
• The retailer didn’t mention anything about the virus in its prepared statement, but a Target spokeswoman said investors could expect to hear more about it during investor presentations this morning. Walmart Inc. and Best Buy Co. have already said the outbreak could cloud their full-year outlooks.
• Analysts had been primarily concerned with the supply-chain impact from the virus, given the amount of products sourced from China, but they’re now becoming increasingly concerned about how consumers will react. Some shoppers rushed to stores over the weekend to purchase bottled water and disinfectant wipes, while others preferred to stay home. One beneficiary could be Costco Wholesale Corp., which reports February sales Thursday.

Market Reaction

• Target shares fell as much as 1.6 per cent in premarket trading Tuesday. The stock had fallen 15 per cent this year through Monday’s close.