Target, one of the largest US retailers, has seen a 52% drop in profits in the September quarter. The company has warned that its Christmas sales are also likely to be lower than last year.
Target attributed the decline in profits to a number of factors, including the rising cost of living, which has led to lower foot traffic in stores.
The cost of living crisis had caused a decrease in consumer spending which led to a 17 percent drop in shares during early trading. Later in the day, shares were still down 13.4 percent.
The retailer has been working to adapt to the changing retail landscape, and has been investing in its online business. However, these efforts have not yet been enough to offset the decline in sales.
Target in Australia is a separate entity owned by Wesfarmers. Its results were revealed back in August.
Although the retailer said lay-offs and a hiring freeze were not current measures, they are looking at launching a cost cutting plan to save between $US2 billion and $US3 billion in the next three years. They did not provide details on the plan.
The company has said that it expects sales to improve in the second half of the year, but that the holiday season will be challenging. Target will be working to attract shoppers with special deals and promotions.
