Target to cut prices for the holidays

NEW YORK - Target Corp. said Monday that it will aggressively cut prices to give consumers bargains during the holiday season, after weak sales of its apparel and home offerings led third-quarter earnings to fall 24 percent.

The discount retailer also said sales in established stores have been weak so far in November, and if that persists, it expects fourth-quarter earnings below analyst expectations.

"The increasing financial challenges and economic uncertainties facing American households continued to pressure our performance during the third quarter," Chief Executive Gregg Steinhafel said.

He also cited higher write-offs in the company's credit-card business, where profit fell 83 percent. Target added $104 million during the quarter to a reserve fund to cover future write-offs as customers have trouble paying their bills.

The company has fared worse than its chief rival, Wal-Mart Stores Inc., as consumers cut back on discretionary spending and shop mainly for necessities, since more than 40 percent of Target's revenue comes from non-essentials such as trendy fashions and housewares.

Last week, Wal-Mart said its third-quarter profit rose 10 percent as sales increased 7 percent.

During the holidays, Target will remain "keenly focused" on offering low prices on national brands and its own products and will match Wal-Mart prices on identical items in local markets, said Kathryn Tesija, Target's executive vice president of merchandise.