Target missed on earnings and revenue even as it cut prices on thousands of items, including milk, diapers and toys, to try to attract discerning shoppers.

Target CEO Brian Cornell told analysts on Wednesday that there was "continued softness" in certain discretionary categories "as consumers continue to spend cautiously."

Target forecast holiday-quarter comparable sales and profit below estimates on Wednesday as value-conscious consumers shopped for low-priced essentials at rival retailers including Walmart, sending its shares tumbling nearly 20%.

Shares of Target dropped by 16% in premarket trading on Wednesday, pacing what would be the stock’s worst day in more than two years after the retailer announced third-quarter earnings and revenue that fell below analyst expectations.