Target braces for first-quarter profit pressure due to tariffs, low demand

March 4 (Reuters) - Target (TGT.N), opens new tab warned on Tuesday that uncertainty around tariffs would weigh on the retailer's profit in the first quarter and doubled down on sourcing more of its products from countries including Guatemala.

Target joined bellwether Walmart (WMT.N), opens new tab, as well as electronics retailer Best Buy (BBY.N), opens new tab in warning about expectations for the year. Sticky inflation and tariffs on imports proposed and implemented by President Donald Trump are expected to temper demand for non-essential categories such as home furnishings and electronics that make up more than two-thirds of Target's sales.

Target shares were down 3.2% in afternoon trading on a day Wall Street's main indexes fell on broader tariff worries.

The retailer told reporters on Tuesday that the new tariffs on imports from Mexico and Canada - that took effect on Tuesday - are "new dimensions" which could result in increased industry-wide prices for seasonal produce such as avocados.

Target, like other retailers, depends on lots of vegetables and fruit like avocados from Mexico during winter, CEO Brian Cornell said.

"But if there's a 25% tariff, those prices will go up ... certainly over the next week," he said on a CNBC interview earlier in the day, declining to say the degree of price hikes Target shoppers will see on its own shelves.

Target also said it would move more of its sourcing for its store brands, ...
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