Confirmed: Canada still hates Target.
The trendy discounter’s third-quarter profit plunged nearly 50 percent as its flopped expansion into Canada continued to sap results, sending the retailer’s shares down 3.5 percent, to $64.19.
Canada shoppers balked at Target’s prices when the “cheap chic” retailer first opened stores there in March, with analysts estimating they were 15 percent higher than in stores across the US border.
Sales were surprisingly weak as a result, a trend that Deutsche Bank said it found “alarming” in an April research note.
Target execs said Thursday they’re still scrambling to clear mounds of goods that were ordered from China for the holidays, and that markdowns will continue to slam margins.
Opening the final two of 124 Canada locations this year, Target said it’s still confident it can rack up $6 billion in yearly sales there by 2017.
In the quarter ended Nov. 2, the Canadian unit generated $333 million in sales and posted a $238 million loss before interest and taxes.