Ahead of the holiday season, retailers reported disappointing earnings on Tuesday, hurt by unseasonable weather and economic uncertainty.
The only bright spot came from off-price retailer Ross Stores Inc., who saw an 11 percent jump in third-quarter earnings.
Discounter Target Corp. reported a 4.5 percent drop in third-quarter earnings to $483 million, or 56 cents a diluted share, from $506 million, or 59 cents, in last year's period. Sales rose 9 percent to $14.34 billion from $13.16 billion. Total same-store sales increased 3.7 percent.
"Our third-quarter earnings were disappointing due to softer sales in our higher-margin categories, leading to lower-than-expected gross margin in our core retail operations," said Bob Ulrich, chairman and chief executive officer, in a statement.
Separately, the company announced a $10 billion share repurchase program, which prompted Fitch Ratings to downgrade the company on the announcement. The ratings firm cut Target's rating to "A" from "A+" — concerned that Target will finance the repurchase program with debt.
Target's shares took a hit, dropping 4.1 percent to close at $51.69.
Limited Brands Inc.'s earnings plummeted almost 50 percent in the third quarter. For the three months ended Nov. 3, earnings fell to $12.1 million, or 3 cents a diluted share, from $23.5 million, or 6 cents, in the year prior.
Sales dropped 9 percent to $1.92 billion from $2.11 billion and same-store sales declined 3 percent.
The company also announced an additional $250 million share repurchase program. During the quarter Limited bought back 14.6 million shares of stock for $336 million.
The women's apparel retailer slashed fourth-quarter guidance to the range of 90 cents to $1.05 a diluted share from previous guidance of $1.18 a diluted share.
Shares of the company closed down 0.1 percent to $17.53, but rebounded 0.2 percent in after-market
Dillard's Inc. swung to a loss in the third quarter, hurt by declining sales and gross margins.
For the three months ended Nov. 3, the company reported a loss of $11.3 million, or 15 cents a diluted share, from a profit of $13.6 million, or 17 cents, in the year-ago period. Results included a gain of $11.1 million related to hurricane recovery of a store damaged by Hurricane Rita in 2005. Sales for the quarter fell 5 percent to $1.63 billion from $1.72 billion last year, while same-store sales dropped 6 percent. Dillard's also announced a new $200 million repurchase program. The company said it bought back $111.6 million worth of shares during the third quarter. The stock rose 5.4 percent, closing at $17.43.
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