Wesfarmers has provided a dismal downgrade to Target’s earning for the 2013 financial year.

Target’s earnings before interest and tax (EBIT) for the 2013 financial year are now expected to be between $140 million and $160 million.

According to the company, the earnings have been affected by a number of factors, including sales performance during the second half of the year. This was exacerbated by a late start to the winter season, which has impacted on both sales and margins. Higher levels of clearance activity results from excess inventory and higher than anticipated shrinkage rates are also to blame. There were also increased costs associated with restructuring activities.

Wesfarmers' managing director Richard Goyder said that while Target's earnings for the current year will be disappointing, appropriate action has been taken to improve its future earnings and competitive position and maintain its strong brand in the Australian market.