the goal (TGT) Price cuts and early holiday promotions don’t quite hit the mark Expected results. Target stock fell more than 21% on Wednesday morning after reporting disappointing results Third quarter earnings. Despite cutting prices on thousands of items and seeing an uptick in customer traffic, shoppers weary of inflation are reluctant to buy.
The weak results led Target to revise its full-year earnings forecast, marking the retail giant’s biggest profit loss in two years as shares fell toward a one-year low.
Target CEO Brian Cornell told investors during the company’s Nov. 20 earnings call that the company faced “unique challenges and cost pressures” that impacted its performance, including company-related expenses. Short strike in port In October. However, he emphasized positive results, such as a 2.4% increase in customer traffic, nearly 11% growth in digital sales, and continued expansion in beauty categories and repeat purchases.
The Minnesota-based retailer missed Wall Street expectations, reporting revenue of $25.67 billion, or about $1.85 earnings per share. Analysts expected it to report $25.9 billion, or approximately $2.30 earnings per share.
Target, is smaller than the value-driven giants Walmartis making a notable impact with its recent efforts to focus on affordability.
In May, Target announced plans to lower prices 5000 items. In October, the company added an additional 2,000 products to the list, with categories including food and cold medications. Analysts note that although Target has not always been viewed as a value leader, its focus on competitive pricing has helped it gain traction in a more… Cautious consumer environment.
As inflation continues to strain household budgets, many consumers have pulled back on discretionary spending, impacting retailers like Target. Company Aggressive pricing strategy I’m starting to win back some of those shoppers. Executives said during the previous quarter discretionary spending in categories like apparel and beauty saw growth, thanks in part to price cuts.
Greg Zakwich, a senior e-commerce expert at software company Omnisend, said in an email that he believes Target is on track for another strong quarter, driven by the extended back-to-school shopping season and ongoing price cuts on everyday essentials.
For now, at least, basics like deodorant, cold medicine and underwear will remain Locked behind glass shelvesaccording to Cornell. Target is not alone in its efforts to reduce theft. walmart (And die) has also adopted this approach and noted that it is experimenting with smartphone access to certain items.
As the holiday season approaches, All eyes will be on the target To see if it can bring shoppers back.