Target parent company Wesfarmers has downgraded the retailer's full year guidance, citing it has been hard hit by the tough trading environment.
According to the company, Target's earnings before interest and tax (EBIT) for the 2013 financial year are now expected to be between $140 million and $160 million.
Commenting on the adjustment, Wesfarmers stated that Target's earnings for the 2013 financial year to date have been affected by a number of factors including:
• sales performance during the second half of the year, exacerbated by a late start to the winter season impacting both sales and margin;
• higher levels of clearance activity resulting from excess inventory;
• higher than anticipated shrinkage rates; and
• increased costs mainly associated with restructuring activities.
Wesfarmers' managing director Richard Goyder added that while Target's earnings for the current year will be “disappointing”, appropriate action has been taken to improve its future earnings and competitive position and maintain its strong brand in the Australian market.