-
Target (TGT, $175.34) posted quarterly earnings that were much weaker than Wall Street expected. The retailer got rid of excess inventory that built up as shoppers shifted their buying habits. It reported a 90% plunge in earnings and missed earnings estimates for comparable sales.
-
Target's quarterly net income fell to $183 million, down significantly from $1.8 billion during the same period a year ago. Plus, its adjusted earnings of $0.39 a share were far below the $0.72 forecast by analysts surveyed by Refinitiv. Sales of $26 billion were up slightly from a year ago and roughly in line with forecasts.
-
The company reiterated its full-year forecast, saying it is now positioned for a rebound. It said it expects full-year revenue growth in the low to mid-single digits. Target also said its operating margin rate will be in a range of around 6% in the second half of the year.
Why it matters
The lower profit came from Target’s glut of inventory. It had $15.3 billion in inventory, a 36% increase from a year earlier. As shoppers have curtailed their spending on items deemed discretionary, squeezed by higher-than-usual prices in essential categories like grocery and gas. Unlike its big-box rival Walmart (WMT, $139.42,) its sales weren't buoyed by a growth in middle-income buyers.
