Target Corporation reported its largest earnings miss in two years, with third-quarter net income declining 12.1% to $712 million. The retailer's comparable sales increased by just 0.3%, with digital sales up 11.1% but store sales down 1.2%. Traffic increased by 2.4%, but the average transaction amount declined, reflecting consumers' cautious spending. Target's shares plunged over 20% following the report, marking one of the worst days in its 40-year history. The company also cut its full-year earnings outlook and guided fourth-quarter earnings per share of $1.85, flat with the third quarter despite the higher-volume holiday period. CEO Brian Cornell noted that "consumers continue to spend cautiously, most notably on discretionary items," as inflation-weary shoppers pull back on nonessential purchases such as apparel and home goods. In contrast, Walmart reported strong earnings and sales growth, benefiting from consumers' preference for value and essentials. Analysts highlighted that Target is losing market share to competitors like Walmart, with Target's performance lagging behind for 36 consecutive months. The contrast between Target's focus on discretionary merchandise and Walmart's emphasis on essentials underscores the diverging fortunes of the two retail giants.