Expectations low for Best Buy, Target earnings
Minnesota's two big national retail powers report earnings this week.
Both Target and Best Buy have been struggling. Target has lost over a $1 billion in its efforts to expand in Canada. And like their peers, the two retailers are finding it hard to increase sales with so many consumers watching their spending closely.
Meanwhile, price competition remains intense and most big merchants, including Target and Best Buy, are offering free shipping for online orders. That eats into profits, says R.J. Hottovy, a retail analyst with Morningstar.
"Most holiday seasons most retailers play hard for consumer traffic and I think that's certainly going to be the case this year," Hottovy said.
Sales at Target stores open for at least one year have been flat or down for three straight quarters. Best Buy's U.S. stores have seen so-called same-store sales fall in 8 of the past 10 quarters.
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