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As one of North American consumer bellwethers, TARGET reported quarterly earnings on Wednesday that fell well short of Wall Street expectations, as the retailer grappled with high shipping costs, higher price cuts and lower-than-expected sales of non-essential items from TVs to bicycles. The market value fell from $99.8 billion to $75 billion, a 25% drop in a single day and a shrinking of $24.8 billion.


The national retailer known for cheap fashion brands of clothing, home decor and more has also seen its ebbs and flows. A year ago, shoppers got extra dollars from U.S. stimulus spending and showed optimism about their purchases when they got their first Covid-19 vaccines. A year later, sales are still up compared to the same period last year. Comparable sales, a key metric that tracks sales in stores open for at least 13 months and online, rose 3.3% in the first quarter. On TARGET's store and its website, traffic increased by 3.9%. Note: The consumer price index, a broad measure of the price of goods and services, rose 8.3% in April compared to a year earlier, according to the U.S. Bureau of Labor Statistics.

However, TARGET fell short of its targets because its benefits "come with unusually high costs". "While we saw healthy revenue growth in the quarter, over time our profits were lower than expected or intended" due to premature and late inventory, distribution center compensation and headcount The increase, and the mix of merchandise sales looking different than before, took a toll on profits.


In the end, Target said it will focus on delivering value, even if it means absorbing some costs. Raising prices "remains our last lever to drive profits," he said. TARGET's results and WALMART's quarterly earnings performance reaffirmed North American consumer trends, significantly lower than expected profits, but they diverged in their portrayal of the U.S. consumer. Affected by factors such as the Russian-Ukrainian conflict pushing up global energy prices and increasing concerns about the imbalance between supply and demand, prices have soared day by day, once breaking through the highest level in nearly 14 years. U.S. natural gas prices have more than doubled since the start of the year, and this year's hot summer could see prices rise by at least another 25 percent.


Investors were stunned by the retail giant's weak performance, which reflected declining profitability, soaring inventories and increased price cuts, casting a cloud over the outlook for the U.S. consumer industry, and consumers' "wallets" were not optimistic. The giants are equally anxious about when the rising costs caused by commodity, energy and supply chain inflation will end.




Shenzhen Xunlaitong specializes in shipping export from Shenzhen to Australia & New Zealand, Germany, Netherlands and more business