Target reported a lower-than-expected increase in sales at established stores as consumers spent more on big-ticket purchases like homes and cars than on discretionary items like apparel, a major source of revenue for department stores.

The Minneapolis-based company's shares dropped more than 7 percent Wednesday. At Tuesday's close, the stock had risen just 1.3 percent since the start of the year. (Get the latest quote here.)

Excluding gains from the sale of Target's pharmacy and clinic business and restructuring charges, earnings stood at $1.29 per share in the first quarter ended on April 30.

Revenue for the quarter came in at $16.20 billion, against the comparable year-ago figure of $17.12 billion.