Target posted a 6.5percentt drop, worse than the 5.8percentt expected by analysts.
Amid widespread consumer anxiety, Wal-Mart weathered a difficult holiday season for retailers, reporting a 2.7percentt increase for December while many of its rivals, including Target, posted losses.
C1 Big Stores, Mixed Reports Wal-Mart reported its lowest sales growth in more than two years, while Target posted a better-than-expected profit.
Target posted a same-store sales increase of 3.1 percent and said that shoppers were starting to buy discretionary items again, though it said staples were still very popular.
In other earnings news, Target posted second quarter profits that beat expectations.
At the discount end of the spectrum, Target posted a same-store sales increase of 1.7% for June, missing expectations.
Overall Target posted revenues of $21.8 billion, beating analyst estimates, and adjusted earnings per share of $1.50, beating its guidance.
Target posted earnings today of $535 million, or $0.74 per share, compared to $436 million, or $0.58 per share, in the same quarter last year.
Wal-Mart Stores, the world's largest retailer, and discount rival Target, posted fourth-quarter profits that beat Wall Street expectations, despite heavy discounting that defined the holiday season.
At the discount end of the spectrum, Target posted a 2.8% increase in May same-store sales, below analyst expectations, while Kohl's said same-store sales rose 0.8%.
