Target Corp. (NYSE: TGT) reported fourth-quarter and full-year 2016 results before markets opened Tuesday. For the quarter, the big-box retailer posted adjusted earnings per share (EPS) of $1.45 and $20.7 billion in revenues. In the same period a year ago, the it reported EPS of $1.52 on revenue of $21.6 billion. Fourth-quarter results also compare to consensus estimates for EPS of $1.51 and $20.74 billion in revenue.

For the full year, the company said it had EPS of $5.01 and revenues of $69.5 billion, compared with 2015 EPS of $4.69 and revenues of $73.79 billion. Analysts had forecast EPS of $5.05 and $69.55 billion in revenues.

Same-store sales slipped 4.3% compared with the fourth quarter of 2015, which the company said included a 1.5% drop due to the removal of pharmacy and clinic sales from the calculation.

In its outlook for the first quarter of 2017, Target said it expects a low- to mid-single-digit decline in same-store sales and adjusted EPS of $0.80 to $1.00. Analysts had forecast EPS for the quarter at $1.33 on revenues of $16.22 billion.

For the full year, Target guided adjusted EPS in a range of $3.80 to $4.20 and a same-store sales decline in the low-single digits. Consensus estimates called for EPS of $5.35 and revenues of $70.51.

None of this is encouraging, either to shareholders or analysts, and the stock is sure to take a big hit in Tuesday’s trading as a result.

Brian Cornell, Target’s CEO, said:

Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores. At our meeting with the financial community this morning, we will provide detail on the meaningful investments we’re making in our business and financial model which will position Target for long-term, sustainable growth in this new era in retail. We will accelerate our investments in a smart network of physical and digital assets as well as our exclusive and differentiated assortment, including the launch of more than 12 new brands, representing more than $10 billion of our sales, over the next two years. In addition, we will invest in lower gross margins to ensure we are clearly and competitively priced every day. While the transition to this new model will present headwinds to our sales and profit performance in the short term, we are confident that these changes will best-position Target for continued success over the long term.

Lower gross margins? More headwinds? Playing the long-game? Shareholders are not going to like this.

Target said it returned $902 million to shareholders in the fourth quarter, $565 million in share buybacks and $337 million in dividends. The company completed a $10 billion buyback program during the fourth quarter and the board approved a new $5 billion program in September, of which the company spent $264 million in the fourth quarter.

Shares are being bludgeoned, trading down about 12.6% in Tuesday’s premarket to $58.50, below a 52-week range of $62.94 to $84.14. The consensus 12-month price target was $74.99 before results were announced.

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