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Target Corp. (TGT) Gap and 200D on watch now..
By: Options Mike | January 15, 2023
• $TGT gap and 200D on watch now.. they are buying into this name here.
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Target Corp. (TGT) If they have good holiday sales Gap and the 200D next target
By: Options Mike | January 8, 2023
• $TGT Moving of $COST numbers, if they have good holiday sales Gap and the 200D next target.
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Target (TGT) Downgraded by Wells Fargo & Company to Equal Weight
By: MarketBeat | January 4, 2023
• Target (NYSE:TGT) was downgraded by research analysts at Wells Fargo & Company from an "overweight" rating to an "equal weight" rating in a note issued to investors on Wednesday, The Fly reports...
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Bear of the Day: Target (TGT)
By: Zacks Investment Research | January 6, 2023
Target (TGT) stock was a pandemic and post-covid superstar. Target, like many others, failed to adapt to quickly changing consumer shopping patterns that caused it to suffer a rough 2022, full of inventory issues, lagging sales, and more.
Target’s earnings outlook has continued to plummet for FY22, FY23, and FY24, with TGT shares tumbling alongside its fading EPS estimates.
Although Target’s long-term outlook like remains intact, now might not be the best time to dive back into TGT, especially with the U.S. economy in the midst of a downturn.
Not Pandemic Shoppers Anymore
Investors first hammered Target stock after its Q1 FY22 earnings release for TGT’s inability to navigate rising freight costs and more. Alongside its bottom-line miss, Wall Street also hated Target’s initial decision to absorb higher costs instead of passing them on to consumers. Walmart (WMT) got hit hard for a similar report at the time.
Target got stuck dealing with inventory issues because the firm simply had too much of the wrong stuff on hand. Consumers spent well over a year buying all of the furniture, appliances, TVs, and other big-ticket items that they needed.
Target was forced to discount items and take other measures to offload its access inventory. Fast forward to TGT’s third quarter release in November, and Wall Street got more bad news. TGT lowered its guidance once again as consumers continued to pull back on spending.
Image Source: Zacks Investment Research
Target is continuing to offer discounts in an effort to attract shoppers to discretionary items. “We know they are spending more dollars on food and beverage and household essentials, and as they are shopping for discretionary categories they are looking for promotions,” CEO Brian Cornell said on TGT’s Q3 earnings call.
The inflationary crunch on shoppers is hitting Target harder than rival Walmart because TGT’s business is made up more heavily of these discretionary items that people have cut out of their budgets.
TGT’s consensus earnings estimate for FY22 is down 32% since its Q3 release alone and way more since the start of 2022. Plus, its outlook for fiscal 2023 is now 21% lower, with FY24 trending heavily in the wrong direction as well.
Bottom Line
Target’s downward earnings revisions help it land a Zacks Rank #5 (Strong Sell) right now. And Zacks estimates call for its adjusted earnings to fall 59% YoY in fiscal 2022 and then come in well below its FY21 levels in fiscal 2023. And its most recent EPS estimates are coming in beneath the current consensus.
Target has also missed our adjusted earnings estimates by an average of 33% in the trailing three quarters. TGT is the Bear of the Day given its near-term outlook and the continued unknowns ahead on the consumer spending and inflation fronts.
Target does remain a possible long-term play given its overall standing and strength within a key segment of the consumer-driven U.S. economy. And Target stock is down about 40% from its highs. But TGT just surged off oversold RSI levels a few weeks ago and some investors might want to wait for a slightly better entry point.
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Target Corp. Repeat Put sweepers in to the 12/30/22 $146 PUTS
By: Money Flow Mel | December 27, 2022
• $TGT Repeat put sweepers in to the 12/30/22 $146 PUTS.
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Target Co. (TGT) Receives Consensus Recommendation of "Moderate Buy" from Brokerages
By: MarketBeat | December 25, 2022
• Shares of Target Co. (NYSE:TGT - Get Rating) have been assigned an average rating of "Moderate Buy" from the thirty research firms that are presently covering the firm, Marketbeat.com reports. Eleven research analysts have rated the stock with a hold recommendation, fourteen have issued a buy recommendation and one has given a strong buy recommendation to the company. The average 1 year price target among analysts that have issued a report on the stock in the last year is $182.19...
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Target Corp. (TGT) Black Friday early numbers look good
By: Options Mike | November 27, 2022
• $TGT Black Friday early numbers look good, if retail runs more gap till fill on this one.
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Target Corp. (TGT) More gap to fill if it wants it..
By: Options Mike | November 20, 2022
• $TGT yes they are buying back that crappy report, but to be far was a bit overdone. More gap to fill if it wants it.. $WMT $COST better to me but never know.
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Target $TGT not doing well around earnings announcements over the past year
By: Barchart | November 16, 2022
• Target $TGT not doing well around earnings announcements over the past year. And after a disastrous 3Q earnings report this morning, shares are down 13.1%. If this holds, it will be the 2nd largest daily loss in history. The biggest was 5/18/22 which was also an earnings date.
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Target's holiday forecast squeezed by 'stressed' consumers, shares fall 17%
By: Investing.com | November 16, 2022
(Reuters) -Target Corp forecast a surprise drop in holiday-quarter sales on Wednesday, blaming surging inflation and "dramatic changes" in consumer spending for a drop in demand for everything from toys to electronics.
Shares of the big-box retailer fell more than 17% in early trading after it also said an early start to holiday season promotions and shoppers holding back for steeper discounts cut its third-quarter profit by half.
Target (NYSE:TGT) said it would launch a cost-cut plan to save $2 billion to $3 billion over three years, but declined to disclose specific details. It, however, said mass layoffs or a hiring freeze are not part of its current plans.
"Clearly it's an environment where consumers have been stressed," Target Chief Executive Officer Brian Cornell said.
A pullback in consumer spending has hit Target the hardest among major retailers as its product mix weighs more toward discretionary items such as clothing, home furnishings and electronics, prompting it to discount heavily to clear excess inventory.
Even with those discounts and the inflation rate easing in October, Target executives said consumers were rapidly giving up discretionary purchases to focus on household essentials.
"It was a precipitous decline (in discretionary demand), and frankly, we've seen those trends in the early part of November as well," said Christina Hennington, Target's chief growth officer. Target halved its fourth-quarter operating margin rate forecast to about 3%, due to expectations of bigger holiday discounts across categories, as well as a rising amount of theft and organized crime in its stores.
Target expects fourth quarter comparable sales to fall in the range of a low single-digit percentage. Analysts had expected a 3.1% rise, according to Refinitiv IBES data.
"Target makes their money in discretionary spending, so the difficulty in the environment hits harder," said Bill Smead, chief investment officer of Smead Capital Management, which owns Target shares worth nearly $209 million.
Walmart (NYSE:WMT), which dedicates more than half of its shelf space to groceries and other daily essentials, raised its full-year sales and profit forecast on Tuesday, but warned that its customers could slow spending on general merchandise categories in the holiday quarter.
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TGT: "A second factor that's impacting our gross margin is inventory shortage or shrink...
By: The Transcript | November 16, 2022
• $TGT: "A second factor that's impacting our gross margin is inventory shortage or shrink...YTD incremental shortage has already reduced our gross margin by more than $400M vs last year, and we expect it will reduce our gross margin by more than $600M for the full year"
Markets & Mayhem
@Mayhem4Markets·3h
$TGT, who has the most aggressive, advanced, and well-funded loss protection department in the industry claims that they lost $400M in inventory due to theft.
I find myself highly skeptical of this claim. I think something stinks at the company. twitter.com/AyeshaTariq/st…
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Target Stock Plunges After Q3 Earnings Miss, Holiday Sales Forecast Cut
By: TheStreet | November 16, 2022
• "In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guests' shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty," said CEO Brian Cornell.
Target Corp. (TGT) posted much weaker-than-expected third quarter earnings Wednesday, and lowered its full-year profit forecast, amid what the retailer called a "meaningful shift" in spending habits linked to surging inflation and broader economic uncertainty.
Target said adjusted earnings for the three months ending in October were pegged at $1.54 per share, down 49.2% from the same period last year and well shy of the Street consensus forecast of $2.12 per share.
Group revenues, Target said, rose 3.3% to $26.5 billion, just ahead of analysts' estimates of a $26.4 billion tally. Target said same-store sales rose 3.2%, topping the Refinitiv forecast of 2.8%, while gross margins narrowed 330 basis points from last year to 24.7%.
Inventories rose 14.4% from last year to $17.117 billion, Target said, a figure that narrowed from the 36% gain recorded over the second quarter, "supported by the decisive actions we took earlier this year".
Looking into the final months of the group's fiscal year, Target said it sees a low single-digit decline in same store sales over the holiday quarter, with an overall operating margin of 3%, down from 3.9% over the third quarter and 8.4% over the same period last year.
"In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guests' shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty," said CEO Brian Cornell. "This resulted in a third quarter profit performance well below our expectations."
"While we're ready to deliver exceptional value for our guests this holiday season, supported by the decisive inventory actions we took earlier this year, the rapidly evolving consumer environment means we're planning the balance of the year more conservatively," he added. "We're also taking new actions to drive efficiencies now and in the future, optimizing our operations to match the scale of our business and drive continued growth."
Target shares were marked 15.8% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $150.98 each, a move that would extend the stock's year-to-date decline to around 36%.
Target's poor results were a sharp contrast to the better-than-expected October quarter update from its larger rival, Walmart WMT, prior to the open yesterday, and speaks to the different mix in sales for the two biggest U.S. retailers.
Walmart, which has a much larger grocery component to its overall revenues and competes at a lower price point on non-discretionary items, said sales rose 8.7% from last year to $$152.8 billion, helping produce adjusted earnings of $1.50 that beat Street forecasts by 18 cents per share.
Looking into the final months of the year, Walmart said it sees adjusted earnings declining by between 6% and 7% from 2021 levels, an improvement from its prior forecast of a slump of between 9% and 11% and its July estimate of a 12.5% decline.
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Earnings Preview: Target Corp. (NYSE: TGT)
By: 24/7 Wall St. | November 14, 2022
• Here is a look at four companies, including two Dow components, on deck to report results first thing Wednesday morning.
Target
Target Corp. (NYSE: TGT) posted its 52-week high on November 15 of last year, and shares closed Friday down more than 50% from that high. On Friday, the company announced a new store design that is both larger and more focused on its same-day delivery service and curbside pickup. Target stores currently fulfill more than 95% of the company’s digital orders, so using the store locations as fulfillment centers allows Target to keep transportation costs lower than online-only retailers like you-know-who.
Of 32 analysts covering the company, 22 have a Buy or Strong Buy rating and 10 others rate the shares a Hold. At a price of around $173.30 a share, the upside potential based on a median price target of $190.00 is about 9.6%. At the high price target of $223.00, the upside potential is 28.7%.
The consensus third-quarter 2023 revenue estimate is $26.4 billion, up 1.4% sequentially and by 2.9% year over year. Adjusted EPS are forecast at $2.18, up more than 450% sequentially and down 28.1% year over year. For the full year ending in January, analysts expect Target to report EPS of $8.04, down 40.7%, on sales of $109.67 billion, up 3.5%.
Target stock trades at 21.6 times expected 2023 EPS, 14.6 times estimated 2024 earnings of $11.90 and 13.0 times estimated 2025 earnings of $13.38 per share. The stock’s 52-week range is $137.16 to $268.98. The company pays an annual dividend of $4.32 (yield of 2.49%). Total shareholder return for the past year was negative 32.1%.
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Walmart (WMT) and Target (TGT) Earnings: Who's Winning The Retail War?
By: Tom Bowley | November 14, 2022
Earnings season is quickly coming to a close, but it's just starting among the big retailers. On Tuesday, we'll get the latest earnings results from Walmart, Inc. (WMT), and that'll be followed by Target Corp's (TGT) quarterly earnings on Wednesday. Walmart and Target earnings will be just the tip of the retail iceberg as we'll also hear from the two big home improvement retailers, Home Depot, Inc. (HD) and Lowe's Companies, Inc. (LOW) on Tuesday and Wednesday, respectively. Throw in Advance Auto Parts, Inc. (AAP), TJX Companies (TJX), Ross Stores, Inc. (ROST), and BJ's Wholesale Club Holdings, Inc. (BJ), and I think it's clear that we'll quickly get a pulse on the state of retail earnings.
Retail Sector: Technically Speaking
What should we expect from Target and Walmart earnings? Well, the widely-diversified retail ETF, SPDR S&P Retail (XRT) has been trading relatively flat vs. the S&P 500 Index ($SPX), so it's giving us very little in the way of clues. Here's how the XRT currently looks (see chart 1).
CHART 1: THE RETAIL SECTOR IS SHOWING SOME SIGNS OF AN UPSIDE. The SPDR S&P Retail ETF (XRT) seems to have turned bullish in the short term but it's approaching resistance.
Short-term price momentum has turned bullish for retailers, but there's still plenty of overhead resistance that needs to be negotiated. One other positive is the XRT's relative price breakout vs. the S&P 500. It reached a three-month high on Friday's close and perhaps is suggesting strong numbers ahead.
So let's get back to the Target vs. Walmart earnings. Is relative price action pointing to a win by Walmart? One way to determine what Wall Street expects is to compare TGT and WMT. From chart 2, you see the Target vs. Walmart relative performance (TGT:WMT) tilting strongly in WMT's favor over the past three months.
CHART 2: TGT VS. WMT. A comparison of the stock price performance of the two companies may provide some clues.
TGT rose strongly late last week and it made up plenty of relative ground vs. WMT, but I don't think it completely reverses three months of declining relative strength. Wall Street has been showing a strong preference for WMT heading into earnings, so I expect to see WMT have a stronger earnings report.
Meanwhile, I expect the best earnings report of all, among retailers this week, to come from TJX on Wednesday morning. TJX is a leading apparel retailer in the Dow Jones US Apparel Retailers Index ($DJUSRA) and the apparel area of retail has been incredibly strong since the beginning of July.
CHART 3: APPAREL RETAILERS SHOW STRENGTH. TJX is one company to keep an eye on during retail earnings week.
While most eyes this week will be on WMT and TGT, I'll be quietly awaiting the TJX report.
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Target Unveils Larger-Format Retail Store Plans
By: Schaeffer's Investment Research | November 10, 2022
• Target plans on opening much larger stores to fuel same-day fulfillment
• The retailer is also gearing up for the holiday season
Ahead of a highly anticipated holiday season, Target Corporation (NYSE:TGT) unveiled plans to debut a brand new, larger-format store. The space will have 150,000 square feet -- 20,000 more than the chain average -- which will allow the retail giant to better fulfill same-day orders. While Target will open stores of all sizes over the next few years, these bigger stores will be the main focus.
In response to the news, TGT is fractionally higher, and was last seen up 0.2% at $153.31. The security's recent performance is underwhelming, to say the least. A mid-May bear gap seems to have put a stamp on Target stock's fate for 2022. The fall drove the shares under the $164 level, and rally attempts were thwarted by the $180 area and, more recently, the 140-day moving average. Going further back, Target stock sports a 40% year-over-year deficit.
Options traders haven't lost faith in TGT, however. This is per Target stock's 10-day call/put volume ratio of 1.99 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This reading sits higher than 78% of readings from the past 12 months, implying a fierce appetite for calls of late.
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Target (TGT) Earnings: Iron Condor Could See 43% Return On Risk
By: Barchart | November 9, 2022
Target (TGT) is due to report next Wednesday before the opening bell. The Barchart Technical Opinion rating is an 8% Sell with a weakening short term outlook on maintaining the current direction.
TGT rates as a Strong Buy according to 17 analysts with 2 Moderate Buy ratings and 6 Hold ratings. Implied volatility is 50.01% which gives TGT an IV Percentile of 97% and an IV Rank of 94%.
Target Corp. has evolved from just being a pure brick-&-mortar retailer to an omni-channel entity. It has been modernizing supply chain to compete with pure e-commerce players. Its acquisition of Shipt to provide same-day delivery of groceries, essentials, home, electronics as well as other products.
Target provides an array of owned & premium branded goods ranging from household essentials and electronics to toys and apparel for men, women and kids. It also houses food and pet supplies, home furnishings and d'cor, home improvement, automotive products and seasonal merchandise. It also offers in-store amenities, consisting of Target Caf', Target Photo, Target Optical, Portrait Studio, Starbucks and other food service offerings.
A greater number of general merchandise stores provides an edited food assortment, including perishables, dry grocery, dairy & frozen items. Its digital channels include a wide merchandise assortment, including many items found in stores, along with a complementary assortment.
Today, we’re going to look at an iron condor trade placed over earnings. These types of trades can be high risk, so make sure you understand how they work before attempting something like this.
An iron condor aims to profit from a drop in implied volatility, with the stock staying within an expected range.
When implied volatility is high, the wider the expected range becomes.
The maximum profit for an iron condor is limited to the premium received while the maximum potential loss is also capped. To calculate the maximum loss, take the difference in the strike prices of the long and short options, and subtract the premium received.
TGT IRON CONDOR
As a reminder, an iron condor is a combination of a bull put spread and a bear call spread.
The idea with the trade is to profit from time decay while expecting that the stock will not move too much in either direction.
First, we take the bull put spread. Using the November 18 expiry, we could sell the 145 put and buy the 140 put. That spread could be sold yesterday for around $0.85.
Then the bear call spread, which could be placed by selling the 180 call and buying the 185 call. This spread could be sold yesterday for around $0.65.
In total, the iron condor will generate around $1.50 per contract or $150 of premium.
The profit zone ranges between 143.50 and 181.50. This can be calculated by taking the short strikes and adding or subtracting the premium received.
As both spreads are $5 wide, the maximum risk in the trade is 5 – 1.50 x 100 = $350.
Therefore, if we take the premium ($150) divided by the maximum risk ($350), this iron condor trade has the potential to return 42.86%.
If price action stabilizes, then iron condors will work well. However, if TGT stock makes a bigger than expected move, the trade will suffer losses.
Trades held over earnings allow little room for adjusting, so they can be a bit hit or miss. TGT has stayed within the expected range following all six of the most recent earnings releases. Although as we know, past performance doesn’t guarantee future performance.
Conclusion And Risk Management
Short-term trades over earnings such as these ones are almost impossible to adjust. Either the trade works, or it doesn’t so position sizing is vital. Short-term trades also have assignment risk, so traders need to be aware of that possibility. This type of trade may not be suitable for beginners.
Please remember that options are risky, and investors can lose 100% of their investment.
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Target Corp. (TGT) Nice little C&H formation here
By: Options Mike | November 6, 2022
• $TGT nice little C&H formation here.
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Target Co. (TGT) Given Average Rating of "Moderate Buy" by Analysts
By: MarketBeat | November 5, 2022
• Target Co. (NYSE:TGT - Get Rating) has been given a consensus recommendation of "Moderate Buy" by the twenty-nine analysts that are covering the firm, Marketbeat Ratings reports. Eight analysts have rated the stock with a hold recommendation, sixteen have assigned a buy recommendation and one has assigned a strong buy recommendation to the company. The average 1 year price target among brokerages that have updated their coverage on the stock in the last year is $194.19...
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Target CEO Sees End to One Problem, Keeps Practice Customers Hate
By: TheStreet | October 22, 2022
• The retail chain has done something many customers don't like (and it does not appear to be changing that policy).
Target (TGT) CEO Brian Cornell recently signed a new deal that will keep him at the helm of the leading retailer for three more years. That new contract allows him to make the long-range moves the chain needs even if that means making some decisions that were painful in the short term.
Recently, that included a decision to sell off excess inventory at a discount in order to make room for the items the chain needs for the holiday season. That decision was made back in June and the need to clear out warehouses came after demand patterns, "radically changed," according to Cornell.
"While this decision had a meaningful, short-term impact on our financial results, we strongly believe it was the best path forward," he said during the chain's second-quarter earnings call. "...We could have held on to excess inventory and attempted to deal with it slowly, over multiple quarters or even years. Well, that might have reduced the near-term financial impact, it would have held back our business over time."
To put it bluntly, while Target could have smoothed out the expense and maximized revenue over a longer period, Cornell thought that was the wrong move.
"It would have degraded the guest experience," he said.
Target's CEO Is Not Worried About a Recession
Recessions are relative. A tough economy does not mean an end to all spending and a value-conscious retailer like Target seems well-positioned to capitalize on tougher times. Realistically, holiday sales generally climb no matter what the country's economic conditions are. That wasn't true in 2008 -- during the height of the housing crash -- but even that was only a 4.7% dip, according to data from the National Retail Federation (NRF).
And, while there are some economic challenges in the U.S. right now, there's nothing that actually suggests people will spend less this holiday season. That's something Cornell addressed in recent comments made to Yahoo's Brian Sozzi.
“Everyone’s talking about recession. And sitting here today, there’s different points of view. You talk to bank CEOs. Some gloom and doom. Others are saying really healthy consumer [spending]. What we’ve seen all year long is really healthy traffic and a guest that’s shopping in our stores and shopping online so that strength in traffic has been driving our business. We’ve delivered solid comps throughout this year. We expect that to continue over the balance of the holiday season,” Cornell said.
Target May Ignore a Customer Pain Point
Just because Target put customers first when it comes to inventory does not mean the chain will always make that choice. If you regularly visit Target you have likely realized that the chain has generally cut down on cashiers in favor or pushing people to self-checkout.
Cornell did not directly address the self-checkout issue, but he did note that the retailer expected to add 100,000 seasonal workers. That's down from 130,000 last year.
The CEO did say he expected to meet the chain's hiring goals. He also made it clear how Target sees itself in the marketplace.
"Core to our proposition is making sure we deliver great value and affordability every time you shop. So we measure pricing really carefully versus our competition. And we want to make sure we're priced right daily, we deliver great value and affordability," he told Sozzi.
Cornell did, however, ignore a direct question about closed cashier lanes and the reliance on self-checkout.
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Target (TGT) Stock Rating Upgraded by Jefferies Financial Group
By: MarketBeat | October 18, 2022
• Target (NYSE:TGT - Get Rating) was upgraded by Jefferies Financial Group from a "hold" rating to a "buy" rating in a research note issued on Tuesday, Briefing.com reports. The brokerage presently has a $185.00 price objective on the retailer's stock, up from their previous price objective of $170.00. Jefferies Financial Group's target price indicates a potential upside of 23.95% from the company's current price...
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Target (TGT) Rolls Out Early Holiday Discounts for Shoppers
By: Schaeffer's Investment Research | October 18, 2022
• Target Corporation starts its Black Friday Deals seven weeks early
• The retailer's stock could run into some technical trouble, though
Last week on Monday, Oct. 15, Target Corporation (NYSE: TGT) announced an early start to its Black Friday Deals. Its Deal of the Day and Weeklong Black Friday Deals are set to run through Thanksgiving Week, giving consumers seven weeks of discounts on items like toys, electronics, everyday essentials, and more for the holiday season.
Target stock is on the rise today, last seen up 4.8% at $156.35, though the equity could still hit a snag at its 110-day moving average, which has pressure shares lower since mid-May and helped contribute to the stock's disastrous post-earnings bear gap. Target stock is now down 32.3% this year.
Nonetheless, Target now offers a very attractive valuation at a forward price-earnings ratio of 12.55 and a price-sales ratio of 0.68. The stock also provides a solid dividend yield of 2.97% at a forward dividend of $4.32. Moreover, the business has performed consistently well over multiple years, reporting 40.7% revenue growth and 136.5% net income growth between fiscal 2019 and fiscal 2022.
However, the company is expected to end fiscal 2023 with a massive 40.7% drop in earnings, which has been a big contributing factor in TGT’s bearish form this past year. Still, Target is estimated to report 3.5% revenue growth for fiscal 2023. In addition, the business is expected to bounce back for fiscal 2024 with another 3.5% estimated increase in revenues and a 47.8% estimated increase in earnings, making the stock potential long-term buy for value investors from a risk-reward standpoint.
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Target Corp. (TGT) Ugly candle on Friday
By: Options Mike | October 16, 2022
• $TGT Ugly candle on Friday as well.
Retail sales were mixed, but Consumer Confidence was better than expected, but retailers got dumped.
June lows back in play here.
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Target (TGT) Is An Attractive Buy-The-Dip Candidate Amid A Battered Retail Sector
By: Investing.com | October 12, 2022
• The SPDR S&P Retail ETF has lost almost 35% of its value this year
• Macro conditions indicate it could be a while before the sector fully recovers from this slump
• Still, Target’s challenges won’t affect its solid long-term plans
The unexpected shift in spending habits after the pandemic-fueled buying spree has raised several red flags for the U.S. retail sector, such as tighter margins, piling inventories, and lower sales projections.
As a consequence, the SPDR S&P Retail ETF (NYSE:XRT) has lost almost 35% of its value this year, more than the 24% decline on the benchmark S&P 500. And with the Fed’s interest rate cycle, stubbornly high inflation, and increasing recession risks, retailers may take much longer to recover from this slump.
XRT Daily Chart
Jeff Gennette, the CEO of Macy’s (NYSE:M), said in August customers across income levels are pulling back on purchases. Days later, Dollar General (NYSE:DG) executives said people are trading down to less expensive versions of everyday items, such as powdered detergents, and putting more purchases on credit cards.
But there are exceptions amid the battered sector. And among those exceptions, I recommend buying Target Corporation (NYSE:TGT), which has lost about a third of its value this year. Shares of the Minneapolis, Minnesota-based discount department store traded on Wednesday at $155.74.
TGT Daily Chart
Target is struggling more than its peers because it is more exposed to discretionary items, such as clothing, home furnishings, and electronics, which customers are buying less after the pandemic.
The company stocked up on these categories, anticipating customers would continue to spend on these items even after the pandemic, but that didn’t happen, leaving the chain with excess inventory, which it’s heavily discounting to clear space.
That was the right strategy, but it took a hefty toll on earnings. While same-store sales rose 2.6% in the three months to July 30, net earnings were down 90% compared with the same period a year ago. The operating margin slumped to 1.2% from 9.8%.
But Will Target Be Stuck In This Situation For Long?
I don’t think so. There are already signs that the company is successfully navigating these short-term challenges, and the worst is behind it. That’s why many valuation models by InvestingPro predict a big upside potential for TGT stock.
TGT Fair Value Estimates
Source: InvestingPro
The physical space occupied by inventory in distribution centers has fallen 20% since June, and cost pressures are easing with the recent decline in oil prices. In addition, the mix of products in the inventory has been shifting toward essential goods, with a low risk of markdowns. According to Chief Executive Officer Brian Cornell:
“The vast majority of the financial impact of these inventory actions is now behind us. We’re positioned to deliver a strong improvement in our profitability this fall.”
There is no doubt that Target has suddenly found itself in a different operating environment than it experienced during the pandemic. But this short-term challenge doesn’t mean the retailer has lost its investment appeal for long-term investors. After a more than 30% pullback, Target’s stock now looks cheap with just 12 times forward earnings and a dividend yield of around 3%.
When picking a long-term winner, the biggest concern is whether the company can produce strong cash flows in good and bad times. Target has an excellent track record on this front.
The company has steadily increased its dividend every year for the last 50 years, covering crises such as the dot-com collapse of the early 2000s, the financial crash of 2008-2009, and the COVID-19 pandemic.
Bottom Line
Target, in my opinion, remains one of the best retail stocks to own due to its solid income potential and ability to rebound quickly. After a troubled 2022 when it faced supply chain issues, higher inflation, and the pandemic-related demand spike, the retailer is well-positioned to regain its lost ground, making it a safe bet in this bear market.
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Target Deal Days Are Back: Here’s What To Expect
By: TheStreet | September 27, 2022
• Target's shopping holiday is returning ahead of Amazon's Early Access Sale. Here's what to expect.
We’re still a few months away from the primetime holiday season, but sale season is already starting in full force. Amazon just announced the Prime Early Access Sale for Oct. 11, but Target (TGT) is starting even earlier.
The retail giant is bringing back its “Target Deal Days” shopping event from Oct. 6 through Oct. 8. You don’t need to be a Red Card holder to score early savings across the many categories that will feature major deals. So ahead of Target Deal Days, we’re breaking down what you need to know and what deals to expect.
While there’s already been a Deal Days event from Target this year, it is returning this fall. Target Deal Days will run from Oct. 6 through Oct. 8. And the best part is that you can just log in to Target.com to score deals in categories like apparel, toys, essentials, home décor, and even tech.
Additionally, Target is offering a Holiday Price Match Guarantee from Oct. 6 through Dec. 24. The retailer notes that if you find a price lower than what you paid for at Target, they’ll match it.
What are Target Deal Days?
Much like Amazon Prime Day, Black Friday, or Cyber Monday, Target Deal Days are a shopping event at the retail stores and online. Target will be offering exclusive deals across all of the major categories.
Target is promising that this upcoming event in early October will be its biggest sales event yet, and an early kickoff to holiday shopping. You can expect deals on hundreds of thousands of products.
Do I need a Red Card or Target Membership to shop?
You do not need to be a Target.com member or a Red Card holder to participate in Target Deal Days. They’re open for all customers or users, though signing up for free Target Circle membership does give you access to deals and rewards year-round.
Additionally, a Target Red Card-- credit or debit -- provides you with 5% off any purchases made with the card at Target in-store or online...
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The Worst May be Over for Target, But is the Stock Safe to Buy?
By: MarketBeat | September 22, 2022
• Long before the words “earnings recession” became part of the financial news conversation, Target (NYSE: TGT) was announcing expectations for an earnings decline. Sure enough, when the company delivered its earnings report in May, Target confirmed what many investors suspected. Earnings were being affected as the company continued to deal with the effects of inflation...
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Target to hire 100,000 holiday workers, offer deals earlier
By: Investing.com | September 22, 2022
(Reuters) -Target Corp said on Thursday it plans to hire up to 100,000 seasonal workers for the holiday season and start offering festive deals earlier than previous years as it gears up for the critical shopping period amid a slowing economy.
The big-box retailer had hired 100,000 workers for last year's holiday season, which was marked by tight labor supply. It had hired about 130,000 seasonal workers each in 2019 and 2020.
Retailers, dealing with billions of dollars worth of unsold stock, have taken a more cautious view of this year's holiday season as consumers facing decades-high inflation cut back on discretionary spending.
Analysts and companies predict another early start to the holiday season as inflation's impact on American wallets means consumers will likely feel a sense of urgency to find discounts.
Target (NYSE:TGT) said it would run its first set of holiday savings deals this year from Oct. 6 to Oct. 8. In 2021, it had begun festive deals on Oct. 10.
The retailer's hiring plans dwarf rival Walmart (NYSE:WMT) Inc, which is looking at adding 40,000 workers in seasonal and full-time roles having already hired 150,000 for the previous holiday season in mostly full-time positions.
The difference in the hiring outlooks between the retailers was down to Walmart compensating for over-hiring last year, that led to excess staffing issues which dampened its earnings in the first quarter, said Jane Hali, CEO of investment research firm Jane Hali & Associates.
Holiday retail sales are expected to rise between 4% and 6% year over year from November to January, compared to the 15.1% increase in the same period last year, according to Deloitte's annual holiday retail forecast released on Sept. 13.
Profits of both Target and Walmart have already taken big hits this year as they were forced to ramp up discounts to clear excess inventory.
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Target Co. (TGT) Insider John J. Mulligan Sells 39,101 Shares
By: MarketBeat | September 16, 2022
• Target Co. (NYSE:TGT - Get Rating) insider John J. Mulligan sold 39,101 shares of Target stock in a transaction that occurred on Wednesday, September 14th. The stock was sold at an average price of $166.02, for a total value of $6,491,548.02. Following the transaction, the insider now owns 118,425 shares in the company, valued at approximately $19,660,918.50. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link...
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Target Corp. (TGT) Up a bit, no real power but room to grind back to 180
By: Options Mike | September 10, 2022
• $TGT Up a bit, no real power but room to grind back to 180.
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Target Goes Beyond Ulta Deal and Adds a New Beauty Service
By: TheStreet | September 9, 2022
• The retailer has added something that you never would have expected in a way that may surprise you.
Many may marvel at how polished a coworker or a boss looks in a meeting when she shows up with great hair and smartly polished nails, but few people (beyond others with the same routine) realize how much time this sort of beauty upkeep requires.
While the advent of gel and SNS manicures have certainly helped nail services last longer -- but majorly compromised the health of the nails they are on in the process -- a typical salon visit to get them can last an hour or more.
The process of removing acrylic, gel, or SNS nails also involves the client soaking their nails in acetone, which simply adds more time to the process.
Many major nail care brands such as OPI, L'Oreal-owned brand (LRLCY) Essie, Revlon-owned (REV) CND, and Nails Inc have released their own "gel nail polishes," which promise similar longevity as the gel nails customers get in salons.
Most women, not to mention LGBTQ+ folks, who love getting their nails done will tell you that you have to suffer a little for beauty -- its a time-consuming process. But thanks to a new partnership between Target (TGT) and a very innovative tech design business out of San Francisco, making your hands look nice is about to become much easier.
What's Target's New Beauty Service?
Six Target stores now offer what could be the most revolutionary beauty service to hit the market in some time: a manicure that only takes ten minutes -- and is performed on you by a robot.
It's called the Clockwork Minicure, and while it may be more accurate to say it applies polish rather than performs a full mani (it does not push back or clip your cuticles as traditional services would do), it only costs $9.99 (or $8 if it's your very first one).
The Clockwork Minicure is in six Target locations now, with three in Texas, two in California, and one in Minnesota. Addresses of the specific locations can be found on this website.
This clever little machine was created by Clockwork, a San Francisco-based think tank funded by angel investors with prominent backgrounds, such as ex-Stitch Fix (SFIX) COO Julie Bornstein and Instacart co-founder Max Mullen.
In addition to this technology, Target has a deal with Ulta Beauty (ULTA) to add the beauty retailer as a store-within-a-store at hundreds of its locations.
What Does This Mean For Nail Salons?
While it may be easy to look at the Clockwork Minicure and assume it might put your local salon out of business, the situation is actually much more complex than that.
Reports of the harmful working conditions in nail salons abound, both due to the inhalation of toxic chemicals by workers and unlawful labor practices. Both are common knowledge in the news, but people still crowd into these salons to get their nails done anyway.
Robot manicures would eliminate both of these issues, but create a much bigger problem -- they also would eliminate the jobs of countless beauty professionals along with them.
However, the Clockwork Minicure is obviously a service for a certain type of client with little time to spare. For those who enjoy the time in the massage chair during a pedicure, chatting with their service professional, or the human touch of a hand or foot massage, it would simply not meet their needs. But for those with a few minutes to spare during a Target run while their prescriptions get filled, it will likely hit the spot.
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Target, McDonald's announce bond offerings
By: Investing.com | September 6, 2022
(Reuters) - Target Corp (NYSE:TGT) will raise about $1 billion in bonds and McDonald's Corp (NYSE:MCD) about $1.5 billion, the companies disclosed in separate filings on Tuesday.
Target is offering $1 billion in notes due 2032, while McDonald's is offering about $1.5 billion in two-part bonds due 2052 and 2032.
The move comes ahead of a Federal Open Market Committee meeting scheduled for September 20-21, where the Fed is expected to decide on whether to go for another 75bp rate increase.
Earlier on Tuesday, IFR reported that at least 19 investment-grade bond deals were expected to price, as issuers and investors get ready for what is expected to be a busy post-Labor Day session.
Separately, Lowe's (NYSE:LOW) Cos Inc also announced pricing of a four-part notes offering at $4.75 billion.
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Q3 2023 EPS Estimates for Target Co. (TGT) Decreased by Analyst
By: MarketBeat | September 2, 2022
• Target Co. (NYSE:TGT - Get Rating) - Zacks Research reduced their Q3 2023 earnings per share (EPS) estimates for Target in a research note issued on Tuesday, August 30th. Zacks Research analyst S. Singh now expects that the retailer will earn $2.08 per share for the quarter, down from their previous estimate of $2.52. The consensus estimate for Target's current full-year earnings is $8.16 per share. Zacks Research also issued estimates for Target's Q3 2024 earnings at $2.88 EPS...
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Target: Inventory Strategy Doesn’t Solve All Retailer’s Problems
By: Vince Martin | August 24, 2022
• Target’s ugly second quarter was driven by management’s decision to aggressively clear excess inventory
• Even down 40%, Target stock is pricing in something close to the pre-pandemic performance
• Given internal and external challenges, that seems potentially too optimistic
In fiscal 2019 (ending January), Target Corporation (NYSE:TGT) generated adjusted earnings per share (EPS) of $6.39. Gross margins were 28.9% of sales while operating profit was 6.0%.
In fiscal 2021, adjusted EPS came in at $13.56, more than double the figure two years earlier; adjusted operating profit was 8.4% of sales.
The key question for Target stock at the moment is which of those two years is more representative of what the business looks like going forward. It’s a difficult question—but, currently, also a common one.
In early 2021, investors believed the gains would be long-lasting. In mid-2022, they don’t. After all, for many so-called “pandemic winners” like Zoom Video Communications (NASDAQ:ZM) or Peloton Interactive (NASDAQ:PTON), the debate really has been over whether the underlying businesses changed during the pandemic or they simply received a short-term boost.
Target isn’t Zoom or Peloton, but it’s evident that U.S. retailers were pandemic winners to some extent. Thanks to stimulus payments, consumers had extra cash to spend. Because of lockdowns and personal protective measures, they had fewer places to spend that cash. And so the likes of Target and Walmart (NYSE:WMT), among many, many others, benefited enormously.
It’s been a different story in 2022. Both retail giants now face billions of dollars of excess inventory. With so much stuff purchased in 2020 and 2021, there’s little need, and in some cases little room, for more.
As second-quarter earnings last week showed, Target is working through that excess inventory. But at the current valuation, success on that front alone doesn’t make TGT stock a buy. Even down 40% from the highs—largely thanks to a plunge following the Q1 report in mid-May—investors still believe that Target is closer to the 2021 business than the 2019 one.
TGT Weekly Chart
An Ugly First Half
There’s little argument that Target’s first half was ugly. Again, the stock plunged after the company slashed its full-year guidance while reporting first-quarter earnings. It cut the forecast again just three weeks later.
Second-quarter results badly missed Wall Street consensus and, in terms of profit margins, were below the company’s already-reduced outlook.
But the Q2 margin miss came from the company aggressively discounting merchandise to get it out the door. Chief executive officer Brian Cornell defended that decision on the second quarter conference call.
“Consider the alternative; we could have held on to excess inventory and attempted to deal with it slowly over multiple quarters or even years. While that might have reduced the near-term financial impact, it would have held back our business over time.”
To some extent, investors have accepted that explanation. TGT did drop 10% in four trading sessions following earnings—but it also rallied into the report. Despite posting an operating margin of just 1.2% in the second quarter, shares have gained nearly 3% over the past month.
Meanwhile, based on FY22 analyst consensus, Target stock trades at just shy of 20x this year’s earnings. That’s a multiple that suggests that the market treats this year as a reset year, with growth to resume in 2023.
What’s Priced Into Target Stock?
In other words, investors are looking forward to at least some extent. But it’s worth looking backward as well.
Again, in FY19, Target generated operating margins of 6%. That was a strong performance, rising 50 basis points year-over-year. A strong consumer no doubt helped.
Assume that Target hit that same level this year. Based on revenue guidance, run-rate interest expense, current share count, and a guided full-year tax rate of 21%, Target’s earnings per share would be about $10.50.
In other words, if the U.S. economy were going just fine, TGT would still be trading at more than 15x earnings. Admittedly, that’s a reasonable, even attractive multiple.
But it’s also a multiple that suggests everything will be fine again. It presumes that Target hasn’t had any self-inflicted wounds this year. It assumes that consumers will remain resilient amid persistently high inflation and that a recession is not around the corner.
Target stock would probably be too cheap against a brighter economic backdrop. But that’s precisely the point: everything isn’t fine, which may be the case for some time.
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Target (TGT) Price Target Raised to $190.00 at Guggenheim
By: MarketBeat | August 22, 2022
• Target (NYSE:TGT - Get Rating) had its price objective raised by stock analysts at Guggenheim to $190.00 in a report issued on Monday, Stock Target Advisor reports. Guggenheim's price target points to a potential upside of 17.31% from the stock's previous close...
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Target Corp. (TGT) 21D just below here
By: Options Mike | August 21, 2022
• $TGT Report a mess, this name may need a while.
21D just below here.
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Stifel Nicolaus Raises Target (TGT) Price Target to $195.00
By: MarketBeat | August 18, 2022
• Target (NYSE:TGT - Get Rating) had its price target boosted by research analysts at Stifel Nicolaus from $185.00 to $195.00 in a report issued on Thursday, Benzinga reports. The firm currently has a "hold" rating on the retailer's stock. Stifel Nicolaus' price objective indicates a potential upside of 12.06% from the stock's previous close...
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Target Stock Retreats After Weak Report
By: Vladimir Zernov | August 17, 2022
• Meanwhile, Lowe’s is gaining some ground in premarket trading after beating earnings estimates.
Key Insights
• Target is under pressure in premarket trading after missing analyst estimates.
• Lowe’s stock is gaining some ground despite weak growth expectations.
• S&P 500 futures are down by almost 1% in premarket trading as traders focus on rising yields.
Yesterday, strong reports from Walmart and Home Depot provided some support to S&P 500. Today’s reports from Target and Lowe’s will not have the same impact as traders will likely remain focused on rising yields.
Target Misses Analyst Estimates
Target reported revenue of $26.04 billion and adjusted earnings of $0.39 per share, missing analyst estimates on both earnings and revenue.
Comparable sales increased by 2.6%, reflecting the 2.7% traffic growth. Target noted that its operating margin rate was just 1.2% due to higher freight and transportation costs, as well as the company’s efforts to reduce inventory.
In the fiscal 2022, the company exports to report full-year revenue growth in the low- to mid-single digits. Operating margin rate is expected to be close to the 6% level in the second half of the year.
Traders did not like the report, and the stock is down by about 3% in premarket trading. The stock performed well in recent weeks, so the weak report may trigger a sell-off due to profit-taking.
Lowe’s Expects No Comparable Sales Growth In 2022
Lowe’s reported revenue of $27.48 billion and GAAP earnings of $4.67 per share, missing analyst estimates on revenue and beating them on earnings.
Comparable sales declined by 0.3%. Lowe’s noted that DIY sales were impacted by the shortened spring and lower demand in certain discretionary categories.
In the full-year 2022, the company expects to report comparable sales in a range from a decline of -1% to an increase of 1%. Interestingly, traders look ready to buy Lowe’s shares despite weak growth, and the stock is up by 1% in premarket trading.
It should be noted that retailers’ earnings should not have a major impact on S&P 500 dynamics today. Traders are focused on rising government bond yields, which present a threat to the stock market rally.
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Target $TGT reports earnings tomorrow before the markets open
By: Stock Market News | August 16, 2022
• Target $TGT reports earnings tomorrow before the markets open, Wall ST is expecting numbers of
EPS of $0.72 down from $3.64 in Q2 2021
Rev of $26.07B up 3.6% YoY
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Earnings Preview: Target Corp. (NYSE: TGT)
By: 24/7 Wall St. | August 15, 2022
• Here is a look at three companies scheduled to report quarterly results first thing Wednesday morning.
Target
Target Corp. (NYSE: TGT) stock has tumbled by about 34% since mid-May, when the company warned that inventory overhang would weigh on second-quarter results. The stock plunged 40% on the report. Shares have staged something of a comeback since dropping to a 52-week low in mid-June, largely due to less concern about inflation and recession. There is still little evidence that Target has solved its inventory forecasting issues yet, and investors will want to hear what the company plans to do to get margins back up.
Of 31 analysts covering the company, 21 have a Buy or Strong Buy rating and 10 others rate the stock at Hold. At a share price of around $172.50, the upside potential based on a median price target of $185.00 is about 7.2%%. At the high price target of $231.00, the upside potential is nearly 40%.
The consensus second-quarter 2023 revenue estimate is $26.09 billion, up 3.7% sequentially and 3.7% higher year over year. Adjusted EPS are forecast at $0.71, down 67.4% sequentially and by 80.5% year over year. For the full year ending in January, analysts expect Target to report EPS of $8.40, down 38%, on sales of $109.84 billion, up 3.6%.
Target stock trades at 20.5 times expected 2023 EPS, 14.2 times estimated 2024 earnings of $13.52 and 12.8 times estimated 2025 earnings of $13.44 per share. The stock’s 52-week range is $137.16 to $268.98. The company pays an annual dividend of $4.32 (yield of 2.5%). Total shareholder return for the past year was negative 33.1%.
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Target (NYSE:TGT) Upgraded to "Overweight" at Wells Fargo & Company
By: MarketBeat | August 9, 2022
• Target (NYSE:TGT - Get Rating) was upgraded by research analysts at Wells Fargo & Company to an "overweight" rating in a research report issued on Tuesday, Stock Target Advisor reports...
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Target Co. to Post Q3 2023 Earnings of $1.70 Per Share, Jefferies Financial Group Forecasts
By: MarketBeat | August 3, 2022
• Target Co. (NYSE:TGT - Get Rating) - Research analysts at Jefferies Financial Group decreased their Q3 2023 EPS estimates for Target in a research report issued on Sunday, July 31st. Jefferies Financial Group analyst S. Wissink now expects that the retailer will earn $1.70 per share for the quarter, down from their previous estimate of $2.50. Jefferies Financial Group has a "Hold" rating and a $168.00 price objective on the stock. The consensus estimate for Target's current full-year earnings is $8.64 per share. Jefferies Financial Group also issued estimates for Target's Q4 2023 earnings at $2.38 EPS, FY2023 earnings at $7.00 EPS, Q1 2024 earnings at $2.39 EPS, Q3 2024 earnings at $2.21 EPS, Q4 2024 earnings at $3.32 EPS, FY2024 earnings at $10.40 EPS, FY2025 earnings at $12.50 EPS and FY2026 earnings at $14.00 EPS...
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Target (TGT) Price Target Lowered to $215.00 at Tigress Financial
By: MarketBeat | July 31, 2022
• Target (NYSE:TGT - Get Rating) had its price target reduced by Tigress Financial from $320.00 to $215.00 in a research report issued on Friday, MarketBeat reports. The firm presently has a "buy" rating on the retailer's stock. Tigress Financial's price objective would indicate a potential upside of 32.83% from the stock's current price...
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Target Co. (TGT) Given Consensus Recommendation of "Moderate Buy" by Analysts
By: MarketBeat | July 28, 2022
• Shares of Target Co. (NYSE:TGT - Get Rating) have been given an average rating of "Moderate Buy" by the twenty-seven research firms that are presently covering the stock, MarketBeat Ratings reports. Ten analysts have rated the stock with a hold rating, fifteen have assigned a buy rating and one has issued a strong buy rating on the company. The average twelve-month price objective among brokers that have issued ratings on the stock in the last year is $189.44...
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Target Corp. (TGT) if it can hold the 50D gap test up @ 168 area in play here
By: Options Mike | July 24, 2022
• $TGT if it can hold the 50D gap test up @ 168 area in play here.
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Target (TGT) Pushing back above this long stranding trendline as MACD curls
By: TrendSpider | July 23, 2022
• $TGT Pushing back above this long stranding trendline as MACD curls.
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Target Corp. beaten to hell. Takes out the 21D room to 155 then maybe the 50D
By: Options Mike | July 17, 2022
• $TGT beaten to hell. Takes out the 21D room to 155 then maybe the 50D.
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Target (TGT) Makes a Bold Move Ahead of Amazon Prime Day
By: TheStreet | July 9, 2022
• The retailer has gone through some supply chain and pandemic-related inventory problems and some of its customers may benefit.
Target (TGT) has seen its sales steadily rise from the beginning of the pandemic through now. The chain strengthened its already-strong relationship with its customers during the darkest covid days and has spent judiciously to evolve its business to accommodate changes in how customers shop.
That has included expanding the availability of curbside pickup as well as buy-online-pickup-in-store (BOPIS) options. Target has also continued to invest in its Shipt same-day delivery service. The chain has struggled, however, as have many others, with inventory issues.
The pandemic made past purchasing data less-than-useful and consumption patterns have changed. That led to shortages early in the pandemic -- when it was hard to buy toilet paper, paper towels, hand sanitizer, and a few other items -- and now it has left the retailer with too much inventory in certain areas.
Target saw a rapid slowdown in spending in its apparel, home, and hardlines categories beginning in March, CEO Brian Cornell said during the chain's first-quarter earnings call.
"While we anticipated a post-stimulus slowdown in these categories, and we expect the consumers to continue refocusing their spending away from goods and services, we didn't anticipate the magnitude of that shift," he said. "..this led us to carry too much inventory, particularly in bulky categories, including kitchen appliances, TVs, and outdoor furniture."
Those overages have led to the company looking to discount some of those items and sell through others to clear space for good inventory that may not be needed right away. Cornell said that the chain would discount some items and
And with very little slack capacity after two years of unprecedented growth, we faced elevated costs to store and indicated rightsizing our inventory position. Nevertheless, we're still seeing healthy overall spending, I guess, even as their spending continues to evolve.
Now, Target has made good on those promises with an extended version of its annual sale for students and teacher.
Target Rolls Out Student, Teacher Discounts
Target has decided to offer college students a 20% discount through its Target Circle rewards program. It's also bringing back tax-free weekends and will extend its Teacher Prep event from July 17 through September 10. That's six weeks longer than the program, which offers teachers 15% off on school supplies, usually runs.
"We know the back-to-school season signals an important milestone for millions of families across the country – and we're here to help by introducing even more ways for guests to save and find everything they need all in one convenient location," said Target Chief Merchandising Officer Jill Sando.
Target will also offer its special "Deal Days," (essentially its answer to Amazon's (AMZN) Prime Day from July 11-13
Target Had to Make Tough Inventory Choices
The retailer ended up with too much inventory in certain areas and it had to make decisions as to how to handle that.
Chief Merchandise Officer Christina Hennington explained the predicament the company was in and how it chose to handle it during the earnings call.
"As we developed our plans for the quarter, our task was to anticipate how spending would change under circumstances no one had ever seen before, given that we were about to compare over two years of historically high federal stimulus payments. As such, we relied on numerous forecasts and estimate, both internal and external, to help determine our view for the quarter. Despite this careful approach, the mix of actual demand materialized differently than we had anticipated," she said.
Basically, the chain had to decide what items to hold onto and which ones to markdown so they would sell through faster.
"In addition, as supply grew and demand shifted away from bigger, bulkier products like furniture, TVs and more, we needed to make difficult trade-off decisions. We could keep this product knowing would sell over time or we could make room for fast-growing categories, like food and beverage, beauty and personal care, and household essentials," she explained. "To preserve the quality of on-shelf presentations and support the guest experience, we chose the latter, leading to incremental markdowns that reduced our gross margin."
Lower margins are a negative in the short-term but Hennington sees a silver lining.
"While these were difficult decisions, we believe they'll pay off in the long term, given that building long-term loyalty remains our top priority," she said.
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