MINNEAPOLIS -- Target Corp. shares fell 11 percent Thursday and Best Buy Co. Inc. stock was down nearly 13 percent after the two large Minnesota retailers reported slower sales growth.
But a bad day for the retailers was good for Hutchinson Technology Inc., which said demand for its suspension assemblies has begun to grow after several quarters of decline. Hutchinson stock rose nearly 29 percent.
Target shares were down $2.875 to $23.188 at the close of regular trading on the New York Stock Exchange, while Best Buy shares dropped $9.125 to $61.875. Hutchinson Technology shares rose $5.312 to $23.75 on the Nasdaq Stock Market.
On the retail side, Target sales increased 7.5 percent in August to $2.74 billion -- "slightly below plan," said Bob Ulrich, chairman and chief executive of the Minneapolis-based company.
"In light of current business trends and the strength of last year's results, we now expect earnings per share to decline somewhat in the third quarter," Ulrich said.
Sales at stores open at least a year rose 3.2 percent at Target stores and 3.7 percent at Mervyn's stores, but fell 5.3 percent at the company's Dayton's, Hudson's and Marshall Field's department stores.
The company expects earnings growth to resume in the fourth quarter.
"We remain confident in our ability to deliver average annual earnings per share growth of 15 percent over time, despite our outlook for lower double-digit growth in fiscal 2000," Ulrich added.
Best Buy, which will announce second-quarter earnings Sept. 12, said its sales for the fiscal quarter rose 18 percent to $3.17 billion, from $2.69 billion a year earlier. However, sales at stores open at least a year rose only 5.1 percent, compared with an increase of 11.1 percent in the same quarter last year.
"Comparable store sales were in line with company expectations," said Allen Lenzmeier, chief financial officer.
Digital products, including cameras, camcorders, cellular phones and DVD hardware and software, continued to sell well and television sales were strong, Lenzmeier said.
Hutchinson Technology, meanwhile, said it had earned about $200,000, or 1 cent a share, in the first nine weeks of its fiscal fourth quarter on sales of $80 million. The quarter ends Sept. 24 and the company expects to announce results for the quarter and fiscal 2000 on Oct. 31.
In addition to increased demand for suspension assemblies, Hutchinson Technology lowered costs by reducing expenses and improving productivity, said Wayne Fortun, president and chief executive.
In the fourth quarter of fiscal 1999, Hutchinson Technology lost $2.1 million, or 9 cents a share, on sales of $141 million. In the third quarter of fiscal 2000, the company lost $22.9 million, or 92 cents a share, on sales of $109 million. The third-quarter loss included a one-time pretax charge of $16.7 million partly related to the cost of cutting 950 jobs.
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