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UPDATE 1-Target trims full-year forecast as Q3 sales fall short

Thursday, 21 Nov 2013 | 8:30 AM ET

(Adds details on revenue, Dollar Tree, Sears US sales)

Nov 21 (Reuters) - Discount chain Target Corp on Thursday blamed "constrained" consumer spending for a tepid rise in third-quarter comparable sales, and lowered its full-year profit forecast as a Canadian expansion proved costlier than expected.

Shares fell 4.3 percent to $63.75 in premarket trading.

Target competes against Wal-Mart Stores Inc and other discount retailers that have ramped up promotions to win over reluctant U.S. shoppers. Last week, Walmart U.S. reported a small decline in comparable sales and announced an aggressive price-matching strategy.

Target, which offers a mix of basic goods and trendy apparel and accessories, pared its full-year outlook in part because its Canadian expansion this year has take longer to pay off than expected. Target opened its first Canadian stores in March after announcing the plan in early 2011.

The discounter expects its Canadian expenses to reduce this year's earnings by between 95 cents and $1.05 per share, up from 82 cents previously.

The retailer said it was looking to earn an adjusted profit per share of $4.59 to $4.69, compared with an earlier range of $4.70 to $4.90.

Third-quarter comparable sales were up 0.9 percent, while analysts estimated a rise of 1.3 percent, according to Thomson Reuters I/B/E/S. Overall revenue rose 4 percent to $17.26 billion, below the Wall Street target of $17.36 billion.

For the quarter ended Nov. 2, earnings fell to $341 million, or 54 cents per share, from $637 million, or 96 cents per share, a year earlier.

Other retailers reported disappointing sales on Thursday. Dollar Tree Inc said comparable sales rose a less-than-expected 3.1 percent, and Sears Holdings Corp reported that U.S. stores fell 4 percent.

(Reporting by Phil Wahba in New York; Editing by Gerald E. McCormick and Jeffrey Benkoe)

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