Target CEO Brian Cornell said the results show “continued soft trends in discretionary categories.”
Target Shares Tumble 10 Percent
CNBC reports Target Shares Tumble 10% as Consumers Buy Fewer Groceries and Home Goods
Earnings per share were $2.03 vs. $2.06 expected.
Target on Wednesday posted a year-over-year sales decline and missed Wall Street’s earnings estimates, as consumers fatigued from high prices bought both fewer discretionary items and groceries.
On a call with reporters, CEO Brian Cornell said the company’s results reflect “continued soft trends in discretionary categories.”
Target also announced Monday it was cutting prices on thousands of everyday items, including milk, bread, paper towels and diapers.
The cheap chic retailer has been particularly hurt by the dynamic because it gets less of its sales from food than rival Walmart, which draws about 60% of its U.S. sales from groceries. That compares with roughly 20% at Target.
Comparable sales, also called same-store sales, tumbled 3.7%, as shoppers bought beauty items but less of other discretionary categories like apparel and home. Discretionary merchandise wasn’t the only part of the store under pressure. Sales in frequency categories, food and beverage and beauty and household essentials, declined by low single digits, Chief Growth Officer Christina Hennington said on a call with reporters.
Are Consumers About to Throw in the Towel?
We had an advance hint at Target weakness.
On May 16, I commented Retail Sales Fall Flat, Are Consumers About to Throw in the Towel?
Nominal retail sales were flat this month but real sales fell 0.3 percent because the CPI rose 0.3 percent.
Eventually, consumer spending will give way. Whether the time is now remains to be seen.
Real vs Nominal Advance Retail Sales Percent Change From Year Ago
On a year-over-year basis, real retail sales have been negative 12 out of the last 15 months.
The vaunted consumer is much less than portrayed.
Target, Walmart, ALL food service, automotive, real estate, education… huge red flags flying high…
…but NVIDIA is selling AI chips… so everything is great… to the moon!
If asset prices don’t adjust (downward) per reality, then the Fed is going to break markets, just to prove a point. Book it.
As someone who travels almost constantly, (staying put for me is boring and my work allows it.
Starbucks across a wide range of smaller rural type locations (and states) are unprecedentedly empty, from 3:30 to 8:00. There’s a small kid burst when school gets out, but the people are just not there. Even in the expensive areas, there’s a massive drop off in customers. Weird to see dozens of empty tables remain empty for hours on end.
Rural fast food is deserted. The less well to do are visibly hurting.
When I got my oil changed at Walmart there were a lot of premium foreign cars in the parking lot.
I was up in Maryville WA pretty close to the big Boeing plant. Everyone who works at Boeing is circumspect and jabbering about the dead whistleblowers. Its BIG news to the employees. They’re convinced, they were murdered.
And that’s the report from the hinterlands.
Ditto on Starbucks. I also notice a lot of employees don’t speak much English or know how to work the cash register. Many others appear mentally disabled. This is the new America.
Are we entering the Pushing on a String Phase of the GFC?
Notice all the Plague stories dropping (again) link to reuters.com
Any connection?
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. link to archive.ph
unfortunately the lower prices are going to be in JUNK/things we DO NOT NEED
food – 20-50% increase coming SOON
Sales would have been higher if there was less shoplifting.
Classic…so sad…so true
Target should start selling bombs and rockets. War $$ is good.
Told friends at work we don’t actually send the Ukraine a billion dollars.. all the armaments are manufactured here.. that’s why you saw those Representatives of our people waving Ukrainian Flags after they pass that disgusting appropriation bill and there’s no way in God’s green earth we can afford..
– Target CEO Brian Cornell said the results show “continued soft trends in discretionary categories.” Shares tumble 10%.
> Discretionary is just that, and when your store doesn’t focus on one thing, then it feels the pain more, as shoppers look to consolidate shopping, and location is most important for all sorts of reasons. Look for this to continue and also widen.
– Target was down on Grocery sales.
> Only 20% of their focus is on Groceries, so that makes sense. Look for this to continue and many may simply stop carrying groceries.
– Are Consumers About to Throw in the Towel?
> On What? Food, Energy, Car Payment, Rent, Um, No, as these things and many others are necessary and will come first. Hair, Dentist, Restaurants, Movies, Gyms, Sports and the like, now they are all throw in the towel items, so expect such, and also for many to go out of business.
Side Note: California is a perfect example of these issues. Their answer, was to raise the minimum wage. Now they have further destroyed jobs and decreased available buyers in one stupid move, even further! Watch CA. Sink like a rock, or at least what is allowed to get or be reported. That is a look at the U.S. in the near future, if this BS keeps up…
1D : yesterday QQQ closed at a new all time high. A higher high today before turning red at 3PM. Wall street might (!!) send QQQ to Mar high. We don’t know what will happen next. 1M : if July (C) < March (C) bad things can happen.
Wall Street doesn’t have a choice. It’s going to Covid lows of 2020
(??)
The regional banks cut branches and eliminated low end wages. Most activity is done online. AI know customers better than junior officers. Higher prices, higher interest rates and stocks trading boosted profit. The top reward themselves. The bottom was eliminated. Service is down bonuses are up. Bank CEOs plan to retire before judgement day. 2008 is not too far.
So who is hiding the original Norman Rockwell painting Man Setting Clock?
I thought that Target was tucking away the profits … Errrr
Budlite of retailers
I sold every share I owned around 240 because it was pumped sky high by $13T in free and easy money handed out by the FED and the Govt. There was only 1 direction to go from there.
Then they got really stupid and went FULL woke. I saw the “tuck” swimwear and full mental sickness (pride) setup and walked out. Haven’t been back since. I just left Walmart and have been there at least 50x since I stopped going to Target. I hadnt been in a Walmart shopping more than 10x in my entire life before that.
Once TGT fires the CEO and the entire Marketing team related to their bullshit woke mental disease, I will rebuy the stock and start going there again. It should be around $85 by that point
People are cutting back so they can pay their increasing rent and mortgage payments.
I cut back to pay the taxes supporting a family of twelve urban minority chillin the style to which they have grown accustomed.
It’s really the endgame. Why bother making consumer goods when you can get control of the housing. Once you have that, you don’t have to produce anything. You sell the blessing of not being driven into the streets to die.
Time to queue the classic song from Archie Bell & the Drells…’TIGHTEN UP’
Credit card defaults at 10-20 year highs in every category of income
Corporate credit refinance starts this year with about $1T I think then $2T or more each of the next 2 years
CFOs will be laying people off to compensate. Just a matter of time until we get recession and Credit spreads, which are now very tight get wider and we get what may be the last deflationary pulse as we head into a depression and the final leg of the 4th turning. Probably why Fed thinks it will need to cut this year
Then the Sovereign debt crisis will take center stage perhaps
“…Chief Growth Officer Christina Hennington said on a call with reporters.”
One wonders if she is proud of that title, which to an outsider makes her appear to be all hat and no cattle.
Target is a sick company. When I was looking for a job I was in touch with people I know there. Their lead executive recruiter is or was completely clueless. And no chance at all of a middle aged white guy getting any kind of position
I grew up best friends with members of the Dayton family which founded Target. The dead daytons are likely rolling in their graves,
You absolutely should have married into the family. That was your real mistake 🙂
Target is a brick-and-mortar retailer that still sells at 17.4 times earnings.
Even with today’s $10+ price decline, it is quite expensive. When (not if) the economy formally enters recession, you will wish you had sold at today’s price.
Haven’t we been in recession for months? Sure seems like it.
Not “officially”.
The economy is diseased but it’s not recession, it’s stagflation you’re feeling.
Consider:
Good-Times are when you get paid to do useful work for someone else, and so you’re both better off.
Recession is when someone else loses their job, so they aren’t helping anyone else, so everyone’s worse off.
Depression is when you lose your job, and not only is everyone you were helping worse off, but your life is hell too.
Stagflation is when you and that other guy both have jobs, but the incentive system is so screwed up that one or both of you isn’t actually helping anyone else. Since less is being produced, but no one has lost income, the cost of everything goes up and now you cannot afford as much as you used to.
I honestly don’t know how brick & mortar survives in it’s present form. I haven’t set foot in these stores for a long time. For me it’s Amazon or, Instacart and occasionally some specialty vendor that ships to my house. Amazon and Instacart pay for themselves every day.
I simply don’t have the time to play retailers game of shuffling items in the aisles in the hopes I pick up some impulse items. Then deal with parking, irate customers, checking myself out..lol, no thanks.
I have no interest in trying on clothes, returning clothes, ordering new clothes, returning those, and on and on. I want shoes, I go to the store. The hassle that has become returns is coming back to haunt all of us. UPS hours changing, waiting in line to send Amazon packages back, now getting tagged with return charges depending on who you buy from at Amazon, fake goods and fake reviews and on and on.
This ain’t 2016 anymore. Unless you’re buying from the mfg or a trusted retailer (which Amazon used to be but is no more), you’re rolling the dice and potentially wasting even more time.
The key is to find a vendor that has the items you want in the size that fits you and repeat the business. It’s why I buy the same brand of socks, underwear, shoes, etc from Amazon or Land’s End or whoever. Once you know it fits and works there is no need to return anything unless you were sent the wrong item.
Anyone that wants to find a reason to drive to a store and waste time will find one and they are likely going for other reasons like to socialize or find a date rather than just shopping.
Well stated. I do the same.
Unfortunately, even the brands I like tend to change things over time so that the items I was able to buy I am no longer able to which of course annoys me to no end.
So every now and then I have to go into some clothing store and try on a few items to get the sizes right so I can order online.
That only works until you need actual clothing with style in your life, not just body-coverings.
I had custom made business shirts made from royal oxford @ $350/each back in the day when I went into the office. I work from home now and wear a $10 t-shirt to most calls. I also don’t wear pants 99% of the time, just pajama shorts.
I still collect a big fat paycheck though. Imagine the savings and the investment opportunities with all that extra cash…imagine it then imagine it again and again.
Holy kadoodle, thats awesome, you wore $350 royal oxford shirts when you worked in the office and now you just wear $10 t-shirts to most calls that you work from home.
I was just wondering do you need a car when you now wear $10 t-shirts when making a call?
Im also very perplexed what business would require such dramatic change in attire when collecting those big fat paychecks?
Multiple homes across the country and around the world, able to buy $1,000,000 t-bill at a time. Millions invested in stocks, a cache of rental homes across the country, etc, etc.
I know Mish has a very thoughtful provoking site, yet all you do is manage to pose on it all day is an amazing testament. Youve really got it made. All I can do is dream of such an amazing lifestyle.
All you gotta do to return amazon stuff is drop it off at Whole Foods. You don’t even need a box. They don’t hassle you in any way. I would imagine they get taken advantage of some….
“…Anyone that wants to find a reason to drive to a store and waste time will find one and they are likely going for other reasons like to socialize or find a date rather than just shopping…”
Ok….and your point? Lots of people do things differently than you for one reason or another. In your view it’s a waste of time and that’s fine, but to others it may be a source of joy. One who is comfortable in how they live thier life doesn’t waste thier time critiquing how others live thiers. Comparison is the thief of joy.
“…Anyone that wants to find a reason to drive to a store and waste time will find one and they are likely going for other reasons like to socialize or find a date rather than just shopping…”
“I have a home up north (not Illinois), one down south, and an apartment in Amsterdam.”
ding, ding ding. Any alarm bells going off? Oh yes, I forgot the multiple alias green fraudster hitchhikes & sails across the ocean in a sailboat to his supposed multiple homes across the country & world.
Oh what a tangled web we weave, when first we practice to deceive.
Oh the irony, remember this is the local green fraudster going forward. Anyone with any sense of critical thinking out there?
Maybe Amazon in Czech is really bad. I live in France and Amazon here is very good. Of course that depends on what you habitually buy. I am retired so my needs may be different from yours.
and with higher rates than last few years more and more will close . I guess the good news is the building can be expensively turned into housing?
I can’t imagine what living in a former Target store would be like.
They tend to end up as warehouses for online delivery (Amazon and the like).
It’s harder than it looks to change a store into housing. Not only do you have to tear it down, you have to get it re-zoned for residential use.
I use Amazon and others for even small items now. They deliver the next day to my door saving me a lot of gas and parking aggravation.
You will save even more aggravation for larger items. I once bought a 700 lb gun safe, delivered to my door FREE. I looked at buying direct from vendor but they wanted $500 in shipping and with Amazon shipping included. Two guys game in with a giant truck, unloaded it on a dolly and set it up in my house.
I have ordered an above ground pool, a green house kit, etc all delivered hassle and shipping free right to my door. For all those items, I would have needed a truck to bring them home.
Walmart is finally waking up to the reality and improving their delivery but they still try to get you into their stores by not offering shipping on all items. They will eventually get it right or perish.
I thought you lived in downtown Chicago and didn’t even own a car? How is it you have space for an above ground pool and a green house?
Walmart’s almost on par now with Amazon. In some area’s its better (groceries). Increasingly it’s better on price too since most of Amazon is 3rd party retailers which quite often are not the cheapest price like they were say 10+ years ago. I tend to only buy on Amazon how if I can’t find a particular item on Walmart.
“I thought you lived in downtown Chicago and didn’t even own a car? How is it you have space for an above ground pool and a green house?”
Ding, ding, ding, TexasTim, hopefully something is finally clicking up there.
The great multiple alias fraud troll (realist, papascam, mpofshit, imgreen, jeffgreen, makra, etc) plays this board like a bullboard scam.
The song remains the same and always has for the fraud,
Republicans in office- worst government ever, worst government ever
Democrats in office-Dont complain, dont complain
Realist politics, Republicans=nazis
Democrats=dont complain
“Once Trump gets in there, everything will be manically better because Trump is gonna eliminate birth control and usher in the unified Reich. /s”
You’re tinfoil hat has cut off circulation to your brain.
RR12 shows classic signs of physical and mental abuse, I don’t respond anymore, needs to get mental help. I wish we had the ignore button back.
I did live in downtown Chicago and liquidated all my holdings when I got permission to work from home (no more office for me). I’ve been back in Texas now for nearly 2 years. I wrote a comment about that somewhere along the way, you must of been out that day.
I am sure someone here with tech skills can find that comment somewhere. And by the way, I own multiple residences, I think I covered that too in a comment somewhere.
I have a home up north (not Illinois), one down south, and an apartment in Amsterdam.
Amazon is subsidizing their retail delivery business with profits from Web Services. This is driving everyone else out of business. This type of business practice used to be illegal.
People want an excuse to drive somewhere. It’s entertainment.
A new handle papascam?
“People want an excuse to drive somewhere. It’s entertainment.”
“I have a home up north (not Illinois), one down south, and an apartment in Amsterdam.”
Any sense of critical thinking?
Please translate to English.
How much of the drop in sales comes from going “woke”? That gave them a lot of bad press.
Maybe they should fire the genius that thought Target should carry “Pride” merchandise in Trump Country.
They did dial it back this year but it’s too little too late for Target. Hope they do “go broke”.
If you went there for clothes for your kids and had only “rainbow” things then that is a good reason to go elsewhere.
Will never go into another Target store and I know others that will not either . I was never big on Target , Thought they were over priced. .They are in bussiness to sell clothes,products who cares if men buy womens clothes or the other way why push any agenda? The board should have fired the whole management team because they are Idiots .
Both Target and Walmart source their products from sweatshops overseas. The difference is that Target is(WAS) really good at marketing while Walmart only cared about having the lowest price.
I’m amazed at the number of people who pay more at TGT for the same crap they can get cheaper at WMT.
Agreed and Walmart/Sam’s have gotten their act together online and. if you ahve the premium membership at Sam’s you get free shipping I use them more than Amazon now
Their board is probably full of wokies and Didn’t Earn It DEI hires.
I think it’s significant. I will NEVER step foot in a Target again. “Go Woke Go Broke”
People have a long memory. Bud Light still hasn’t recovered and probably never will. I recently added Hersheys to my list of stores to boycot. I’m not interested in companies promoting their trans/gay crap. I don’t care what you do in your own home but putting a trans on a candy bar wrapper that kids see is a NO GO for me.
Target’s too fancy for that crowd anyhow. Real Americans go to Walmart.
Maybe AI will start shopping at retail stores …
The AIs will self drive there to buy the wind powered thorium and solid state batteries which will save the world. With freshly printed money they “made from their home” as it sat there rotting.
Life in the #DumbAge…….
I hope the AIs do not watch The Matrix and get any bright ideas about better battery sources.
The obesity epidemic has greatly increased the capacity of those batteries.