US retail chain Target has slashed its expectations for the year after a sharp fall in sales which it blamed on a "highly challenging environment" amid the introduction of trade tariffs.
Its sales slumped by 5.7% in the three months to May, at a time when the company also faced a backlash following a previous decision to end diversity, equity and inclusion (DEI) targets.
Bosses declined to confirm any potential price rises due to higher import taxes, saying raising prices could be a "last resort."
Brian Cornell, chief executive of Target, said pricing decisions would depend on the retailer's efforts to source more products in the US and reduce its reliance on China.
"That is going to play a very important role," he said following the company's results.
Unlike its rival Walmart, which generates the bulk of its revenues from selling grocery items like bananas, milk, toilet paper, and shampoo, Target's big sellers are mostly in non-essential goods, such as home furniture and beauty products.
It sources the majority of such products from China, with 30% of its store-label goods from the country. That is down from 60% in 2017, but analysts have said the impact of higher import tariffs on goods from the country will be difficult to navigate.
US President Donald Trump has imposed tariffs on many countries since returning to the White House in an attempt to encourage businesses and consumers to buy more American-made goods.
Trump hopes his policy will help boost US manufacturing and jobs but economists have warned it could lead to higher prices for customers.
The US and China have agreed a truce to lower import taxes on goods being traded between the two countries, which has de-escalated the trade war between the world's two biggest economies, but US import taxes on Chinese remain higher than before at 30%.