NEW YORK CITY, New York: Target Corp has downgraded its overall holiday-quarter sales forecast, blaming surging inflation and "dramatic changes" in consumer spending.

Also, after announcing an early start to holiday season promotions, and cutting its third-quarter profit by half, shares in the company fell more than 17 percent.

Target has said it would launch a cost-cutting plan to save $2 to $3 billion over three years, but stressed that mass layoffs or hiring freezes are not part of its current plans.

"Clearly, it is an environment where consumers have been stressed," noted Target Chief Executive Officer Brian Cornell, as quoted by Reuters.

As its product mix weighs more toward discretionary items such as clothing, home furnishings and electronics, a decline in consumer spending has hit Target the hardest among major retailers, forcing it to discount heavily to clear excess inventory.

Target executives admitted consumers were rapidly giving up discretionary purchases to focus on household essentials.

"It was a precipitous decline in discretionary demand, and frankly, we have seen those trends in the early part of November, as well," said Christina Hennington, Target's chief growth officer, according to Reuters.

According to data from Refinitiv IBES, Target expects fourth quarter comparable sales to fall in the range of a low single-digit percentage, compared with analysts' forecast of a 3.1 percent rise.