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Target earnings drop, sales for rest of 2016 expected to fall

The news led to a 6.25-percent drop in stock price in pre-market trading Wednesday.

By Ed Adamczyk
Target Corporation reported a drop in sales in the second quarter of 2016 and predicted sales for the rest of the year will fall by 2 percent or remain flat at best. File photo by Ken Wolter/Shutterstock
Target Corporation reported a drop in sales in the second quarter of 2016 and predicted sales for the rest of the year will fall by 2 percent or remain flat at best. File photo by Ken Wolter/Shutterstock

MINNEAPOLIS, Aug. 17 (UPI) -- Target Corporation reported a 1.1 percent decrease in sales in the second quarter of 2016, leading to a 6.25-percent drop in stock price in pre-market trading Wednesday.

It also lowered its sales forecast for the end of 2016, including the holiday season. Target projected that its "comparable sales," a metric which ignores factors like store closings and the sale of its pharmacy business to CVS Health, could fall by up to 2 percent, and remain flat at best.

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Sale in Target's core categories, including health and wellness, baby items, and housewares rose 2 percent in comparable sales in the most recent quarter. Its e-commerce business, though, slowed; Target has invested billions in an attempt to compete with Walmart and Amazon, and saw e-commerce sales rise 16 percent in the past quarter compared to 23 percent in the previous quarter.

Net income fell to $680 million in the second quarter of 2016, compared to $753 million in 2015's second quarter.

Stock shares were off 6.25 percent, at $70.76, late Wednesday morning.

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