Target third-quarter comparable sales, earnings miss estimates; shares drop

By Nandita Bose

(Reuters) - Target Corp reported third-quarter earnings and comparable sales below estimates on Tuesday at a time when a strong economy has boosted consumer spending at rival retailers, sending its shares down 7 percent in premarket trade.

Sales at stores open at least a year rose 5.1 percent, short of analysts' estimates of a 5.21 percent increase, according to IBES data from Refinitiv.

Profit missed expectations as price cuts, higher wages and investments in its online business ate into margins. Excluding items, Target earned $1.09 per share in the quarter, below the average estimate of $1.12 per share.

The retailer remained confident it could reach its earlier full-year earnings outlook, hoping its investments help it compete against online behemoth Amazon.com Inc and brick-and-mortar rivals like Walmart Inc during the key holiday season.

Target will offer free two-day shipping on hundreds of thousands of items through Dec. 22 with no minimum order or membership required.

Sales rose to $17.59 billion, below the average estimate of $17.8 billion.

Its third-quarter performance comes after it reported its best comparable-sales growth in 13 years during the second quarter.

Target's shares dropped 7.1 percent at $72.25 in premarket trading.

(Reporting by Nandita Bose in New York; Editing by Jeffrey Benkoe)