Sales and profits at Target were disappointing for the three months ending Jan. 29. Net income declined by about 5 percent to $981 million.
The retailer says that was largely because it choose not to be as aggressive as some rivals were with price cuts. Target CEO Gregg Steinhafel says the company expected sales at stores open at least one year — a key industry benchmark — would increase by about 3 percent. But they only rose by 2 percent.
"The shortfall was concentrated in the peak of the holiday season, as promotional activity throughout retail was exceptionally intense and we choose to maintain an appropriate balance between driving sales and profitability," Steinhafel said.
Target says its performance was also hurt by its website, which had speed, navigation and other problems. The company says it has been fixing the site and its performance has improved.
Shoppers also made greater use of company-issued credit and debit cards that offer discounts, which further narrowed profit margins.