This story was updated at 8:45 a.m. EDT.
Shares of Target Corp. sank Wednesday after the retailer reported a higher-than-expected quarterly profit, but sales at established stores came in below analysts’ estimates.
Target’s share price was down 8 percent at $68 in early trading.
The sales slip came as consumers spent more on big-ticket purchases like homes and cars than on discretionary items like apparel, a major source of revenue for department stores.
Target said sales at stores open at least a year rose 1.2 percent in the first quarter ended on April 30, missing market expectations for a 1.6 percent increase, according to research firm Consensus Metrix.
Net sales fell 5.4 percent to $16.2 billion, mainly due to the sale of the pharmacy and clinic business to CVS Health Corp. Analysts on average had forecast $16.32 billion, according to Thomson Reuters I/B/E/S.
Target, the sixth-largest U.S. retailer, said that given the slowdown in consumer demand, second-quarter comparable sales would be flat to down 2 percent even though it was confident that it would meet its earnings outlook of $1.00 to $1.20 per share before special items.
Excluding restructuring charges and gains from the CVS deal, first-quarter earnings stood at $ 1.29 per share, up from $1.10 a year earlier.
Analysts on average were expecting a profit of $1.20 per share.
Data from Reuters were used to report this story.