Heading into the all-important holiday months, budget-conscious Target customers shopped more but didn’t necessarily spend more.

As a result, the retailer missed its sales and earnings expectations for the quarter that ended in October; profits declined 12% year over year to $854 million.

Investors punished Target on Wednesday, tanking the company’s stock price. It was down 20% in midday trading.

“We’re not pleased (with) where we are today, but we see a lot of green shoots and a lot of long-term opportunities to continue to advance our business,” CEO Brian Cornell told analysts Wednesday morning.

Target has been slashing prices this year to claw back customers increasingly opting for Walmart or Amazon.

“That’s driving traffic to our stores,” Cornell said during a call with media. “We feel really good about the reaction we’re currently getting.”

The Minneapolis-based retailer saw a 2.4% bump in store traffic for the quarter that amounted to an extra 10 million transactions over the same quarter last year.

But revenue has not seen a corresponding lift. Same-store sales were up just 0.3% over last quarter, missing analyst estimates.

“We’re still seeing consumers shop very cautiously, and we’re planning accordingly,” Cornell said.

Even with all those extra store visits — and a 10.8% increase in digital sales — discretionary spending on apparel, home goods and “hardline” items like appliances remained weak.

Meanwhile, October’s Target Circle week was the best yet, with a notable sales bump and 3 million new members in the loyalty program. A Blake Lively team-up also represented “our biggest hair care launch on record,” said Rick Gomez, chief commercial officer at Target.

Those bright spots, and strong beauty sales, partly offset what executives consider a short-term economic headwind. Alarm bells aren’t ringing on Nicollet Mall just yet.

“We know over time those trends will reverse,” Cornell told analysts. “We’ll continue on our current strategy, stay in step with the consumer and make sure Target’s doing the things that consumers across America expect from us.”

Yet Walmart, which reported strong results Tuesday, is attracting more high-income shoppers — normally Target’s bread and butter — contributing to a sizable increase in same-store sales year over year for the quarter.

“There is a sense that Walmart is on the front foot at a time when Target is struggling to remain as relevant as it once was,” said Neil Saunders, managing director of GlobalData.

Edward Jones analyst Brian Yarbrough said Target is far more reliant on discretionary spending, which was also tepid at Walmart.

“There’s definitely some economic headwinds. But when you look across the space, Walmart, Amazon and Costco are winning and the rest are, I don’t want to say a disaster, but underperforming,” Yarbrough said. “Target is losing market share.”

Along with the revenue stagnation and profit decline, Target lowered its financial outlook for the rest of the year.

One issue weighing on the bottom line: Target stocked up ahead of the short-lived East Coast port strikes, an expensive proposition.

“Our team took decisive action to … ensure we had inventory for the biggest season of the year,” Cornell said. “We don’t regret those actions.”

Revenue reached $25.2 billion. The company now expects full-year earnings per share in the range of $8.30 to $8.90 after upping its forecast last quarter to $9 to $9.70.

“It’s disappointing that a deceleration in discretionary demand, combined with some cost pressures, have caused us to take our guidance back down,” said Chief Operating Officer Michael Fiddelke.

Though Target expects a robust holiday shopping season, officials expect sales for the fourth quarter, which ends in January, will be flat compared with last year.

“We’re guiding with some conservatism, hopefully there will be some upside as we get into the season,” Cornell said. “Some of the biggest days are still in front of us, obviously some big weeks ahead, and we’ll watch that carefully.”

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