Shares of Amazon.com (NASDAQ: AMZN) declined on Wednesday after rival retailer Target (NYSE: TGT) reported a steep decline in profits. By the close of trading, Amazon's stock price was down 1.8% after falling as much as 3.4% earlier in the day.
Target was forced to issue heavy discounts to clear out excess inventory. That weighed heavily on the discount retail chain's profitability. Its gross and operating margins fell to 24.7% and 3.9%, respectively, in the third quarter, from 28% and 7.8% in the prior-year period. Target's earnings per share, in turn, plunged 49% year over year to $1.54.
The retailer's guidance was even more alarming to investors. Target now projects "a low-low-single digit decline" in same-store sales. Management also expects the company's operating margin to decline further, to 3%.
Source Fool.com