Important Takeaways:
- The company is feeling the pinch as high prices on essentials keep consumers’ wallets tight. The Minneapolis-based retailer reported another tough quarter, with revenue and profits falling short of expectations.
- Target’s comparable sales, which include stores and digital channels open for at least a year, dropped 3.7 percent in the three months ending May 4, marking the fourth consecutive quarter of decline. Revenue fell 3.1 percent to $24.53 billion, just above Wall Street’s forecast of $24.52 billion. Net income was $942 million, or $2.03 per share, slightly missing analysts’ projections by three cents, according to the Wall Street Journal.
- Shares plummeted nearly 9 percent in premarket trading and were trading down around 6.7 percent midday, reflecting investor unease over the continuing sales slump.
- Target appears to be weathering the inflation storm worse than its competitors. Indeed, consumer spending has been rising even while Target’s sales fall, suggesting the company is losing market share. Walmart, the nation’s largest retailer, saw a 3.8 percent rise in comparable store sales. Amazon and Costco are also doing well.
- Target has been sharply criticized in recent years for embracing a woke agenda and leftwing views of sex, including prominently displaying children’s apparel promoting transgender ideology as part of its celebration of so-called “Pride month.” The company recently decided to limit its “Pride themed” merchandise this year, restricting apparel to adult sections and selling them in only around half of its stores, after sales took a hit because of customer backlash against the promotion of transgender ideology.
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