Target (NYSE:TGT) reduced the upper end of its full-year earnings outlook and reaffirmed expectations for a sales decline in the current quarter, signaling a cautious view heading into the holiday season.

The retailer continued to face an uncertain macro backdrop shaped by broad U.S. tariffs and a prolonged federal government shutdown, which contributed to consumer hesitation on discretionary purchases. Target also continued to lose market share to Walmart, which expanded its delivery capabilities and focus on essential goods. Operational challenges, including understaffing and inventory mismanagement, further pressured performance despite growth in e-commerce.

Comparable sales fell 2.7% in the third quarter, missing consensus expectations of a 2.06% decline. Digital sales rose 2.4%, below Wall Street's 3.45% estimate.

Still, stronger results from Target's Roundel advertising division helped lift quarterly EPS to $1.78, ahead of expectations of $1.73.

Target now anticipates adjusted full-year earnings of $7 to $8 per share, down from a previous range of $7 to $9. The guidance excludes first-quarter legal settlement gains and third-quarter severance and asset-related charges.