Target profit plunges 90% as inflation-weary shoppers pull back

LioninHouston

Well-Known Member
Gold Member
Dec 12, 2005
26,838
40,584
1
But, but, but Joe Biden almost caught up to Trump's Feb 2020 number of employed Americans.......

90% reduction in profit + shoppers pulling back = layoffs. Courtesy of Joe Biden.

https://www.cnn.com/2022/08/17/investing/target-earnings/index.html
Shhhhh. You’ll wake up Joe.
Joe-Biden-Appears-to-Fall-Asleep-During-Opening-Statements-at.jpg
 

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
Shhhhh. You’ll wake up Joe.
Joe-Biden-Appears-to-Fall-Asleep-During-Opening-Statements-at.jpg

You do realize that Target's profit decline was self imposed. They were overbought and had to take heavy markdowns as they are trying to lower their inventory level. As a result, their sales actually grew by 3.3% but much of these sales were at greatly reduced prices. That obviously lowers margins. Target is trying to run leaner to be able to increase their stock turns rather than carrying excessive inventory. Their loss in profits was not due to any type of recession pressures, etc. It was self imposed in order to develop a more desirable inventory level.

You can read the following quotes from Chain Store News:

Target puts excess inventory in crosshairs; will build five DCs]
While the company says it is planning cautiously for the remainder of the year, Target is maintaining its prior guidance for full-year revenue growth in the low- to mid-single digit range, and an operating margin rate in a range around 6% in the back half of the year.
“I’m really pleased with the underlying performance of our business, which continues to grow traffic and sales while delivering broad-based unit-share gains in a very challenging environment,” said Cornell. “Looking ahead, the team is energized and ready to serve our guests in the back half of the year, with a safe, clean, uncluttered shopping experience, compelling value across every category, and a fresh assortment to serve our customers’ wants and needs.”
Minneapolis-based Target Corporation operates nearly 2,000 stores and an e-commerce site.
 

bourbon n blues

Well-Known Member
Nov 20, 2019
21,832
25,462
1
But, but, but Joe Biden almost caught up to Trump's Feb 2020 number of employed Americans.......

90% reduction in profit + shoppers pulling back = layoffs. Courtesy of Joe Biden.

https://www.cnn.com/2022/08/17/investing/target-earnings/index.html
My wife and I just refuse to pay a certain amount for certain things so we are cutting back. The dirty side of inflation is the older guy who won't buy a new truck because he's not paying over sticker> I have a paid off Tacoma with low miles, the dealer begs me for the truck and promises a great deal but why bother? It has 68,000 on it. It'll last.
In the old days I might get a new one. Old days like two years ago. And that's part of the recession.
 
  • Like
Reactions: bison13 and psuted

Hotshoe

Well-Known Member
Gold Member
Feb 15, 2012
26,396
42,773
1
You do realize that Target's profit decline was self imposed. They were overbought and had to take heavy markdowns as they are trying to lower their inventory level. As a result, their sales actually grew by 3.3% but much of these sales were at greatly reduced prices. That obviously lowers margins. Target is trying to run leaner to be able to increase their stock turns rather than carrying excessive inventory. Their loss in profits was not due to any type of recession pressures, etc. It was self imposed in order to develop a more desirable inventory level.

You can read the following quotes from Chain Store News:

Target puts excess inventory in crosshairs; will build five DCs]
While the company says it is planning cautiously for the remainder of the year, Target is maintaining its prior guidance for full-year revenue growth in the low- to mid-single digit range, and an operating margin rate in a range around 6% in the back half of the year.
“I’m really pleased with the underlying performance of our business, which continues to grow traffic and sales while delivering broad-based unit-share gains in a very challenging environment,” said Cornell. “Looking ahead, the team is energized and ready to serve our guests in the back half of the year, with a safe, clean, uncluttered shopping experience, compelling value across every category, and a fresh assortment to serve our customers’ wants and needs.”
Minneapolis-based Target Corporation operates nearly 2,000 stores and an e-commerce site.
Lmao, self imposed. It's called mismanagement, and this is the result. They'll be no defending what's coming regarding food supplies and inflation. Keep preaching, professor. Most of us like in the real world, not bullsh&t marketing, book theory. We had this discussion before. The street rules, not your pathetic Penn State classroom.
 

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
Lmao, self imposed. It's called mismanagement, and this is the result. They'll be no defending what's coming regarding food supplies and inflation. Keep preaching, professor. Most of us like in the real world, not bullsh&t marketing, book theory. We had this discussion before. The street rules, not your pathetic Penn State classroom.
And you have an understanding of retail management? I’ll have to have you come in as a guest speaker. I don’t teach by text book theory. Besides dealing with management issues I also have retailers into class to discuss the way they do business. Spare me your impressions of what my class is all about. You obviously have no clue.
 

Hotshoe

Well-Known Member
Gold Member
Feb 15, 2012
26,396
42,773
1
And you have an understanding of retail management? I’ll have to have you come in as a guest speaker. I don’t teach by text book theory. Besides dealing with management issues I also have retailers into class to discuss the way they do business. Spare me your impressions of what my class is all about. You obviously have no clue.
Lmao. You think a classroom is any sense of reality. Classroom is theory, ignorant theory at best. And I guarantee you, I could teach your students reality of the street and business. Stay in your glass house while your rankings keep falling. You're a part of it.
 
  • Like
Reactions: d-dawg and Sullivan

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
Lmao. You think a classroom is any sense of reality. Classroom is theory, ignorant theory at best. And I guarantee you, I could teach your students reality of the street and business. Stay in your glass house while your rankings keep falling. You're a part of it.
I was a retailer for 10 years. I owned 6 different retail stores over that time. I don’t teach by theory. I teach from experience and many of my former students are now successful executives in some the best retail operations. I hear from them on a regular basis. You want to try again?
 

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
106,411
60,285
1
I was a retailer for 10 years. I owned 6 different retail stores over that time. I don’t teach by theory. I teach from experience and many of my former students are now successful executives in some the best retail operations. I hear from them on a regular basis. You want to try again?

"Would you like fries with that?"
 
  • Like
Reactions: Sullivan

Hotshoe

Well-Known Member
Gold Member
Feb 15, 2012
26,396
42,773
1
I was a retailer for 10 years. I owned 6 different retail stores over that time. I don’t teach by theory. I teach from experience and many of my former students are now successful executives in some the best retail operations. I hear from them on a regular basis. You want to try again?
Sure. Who provided the capital for your business? Retail is just one part of business. It's also dead on the hoof.
 

1Hammers1

Well-Known Member
Jan 26, 2014
529
1,008
1
Target was one of the privileged company's that got to stay open every single day during the cv-19 lockdown. Need cloths in 2020 target was open. They had a government ordered monopoly on sales. It wasn't fair. Hope they get continue to fail in the Biden economy.
 

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
Target was one of the privileged company's that got to stay open every single day during the cv-19 lockdown. Need cloths in 2020 target was open. They had a government ordered monopoly on sales. It wasn't fair. Hope they get continue to fail in the Biden economy.
Got to stay open? Not sure what you mean…
 

bourbon n blues

Well-Known Member
Nov 20, 2019
21,832
25,462
1
Lmao, self imposed. It's called mismanagement, and this is the result. They'll be no defending what's coming regarding food supplies and inflation. Keep preaching, professor. Most of us like in the real world, not bullsh&t marketing, book theory. We had this discussion before. The street rules, not your pathetic Penn State classroom.
I obviously need to post this again:

 
  • Like
Reactions: Fletchster1

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
We're you in the United States in 2020 ? Target was one of the very few clothing stores that was safe to buy from. Crowded and long lines in the mega store was safe.
Walmart in our town was open and most people here felt safe shopping there even though everyone had to wear a mask. Besides, you referenced 2020. Wasn’t Trump the president the entire year? What would Biden have had to do with it? There were no restrictions on general merchandise retailers as far as being allowed to stay open. Restaurants on the other hand were restricted depending on which states they were in.
 
  • Like
Reactions: 1Hammers1

Sullivan

Well-Known Member
Nov 24, 2001
16,973
13,014
1
Initially SBA loans…

So the SBA backed your loan, because other banks didn’t want to take a gamble with you?

And if you had success, why did you own 6 stores over a 10 year period, and then give it up to teach?
 
Last edited:

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
So the SBA backed your loan, because other banks didn’t want to take a gamble with you?
No because I got a better rate and I also got the loan through a local bank. The SBA guarantees the loan and the bank lends the money. A lot of businesses have used SBA loans to get started or to expand. It took several months to get it and I had to do a lot of projections as well as other paper work. These loans are not uncommon.
 

Sullivan

Well-Known Member
Nov 24, 2001
16,973
13,014
1
No because I got a better rate and I also got the loan through a local bank. The SBA guarantees the loan and the bank lends the money. A lot of businesses have used SBA loans to get started or to expand. It took several months to get it and I had to do a lot of projections as well as other paper work. These loans are not uncommon.

Is this the way you spin it to your students?

I’d sooner believe that your local bank was unwilling to do the loan without the guarantee.
 

1Hammers1

Well-Known Member
Jan 26, 2014
529
1,008
1
Walmart in our town was open and most people here felt safe shopping there even though everyone had to wear a mask. Besides, you referenced 2020. Wasn’t Trump the president the entire year? What would Biden have had to do with it? There were no restrictions on general merchandise retailers as far as being allowed to stay open. Restaurants on the other hand were restricted depending on which states they were in.
It's pretty obvious the only thing on your mind is Trump. The subject is Target.
 
  • Like
Reactions: Ski

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
Is this the way you spin it to your students?

I’d sooner believe that your local bank was unwilling to do the loan without the guarantee.
You obviously know nothing and it’s not worth explaining it to you. You obviously have never started a business. If you want to believe I couldn’t get the financing I needed.be my guest.
 

Sullivan

Well-Known Member
Nov 24, 2001
16,973
13,014
1
You obviously know nothing and it’s not worth explaining it to you. You obviously have never started a business. If you want to believe I couldn’t get the financing I needed.be my guest.

So the teacher doesn’t want to talk about his failed attempt at business?
 
  • Like
Reactions: Ski

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
So the teacher doesn’t want to talk about his failed attempt at business?
You aren’t worth the effort. I’m done here however just to clarify… I sold all of my businesses for profit. Either you are totally ignorant or you are just trying to piss me off…. Again, believe what you want. I’m comfortable with what I’ve accomplished.
 

TN Lion

Well-Known Member
Sep 6, 2001
33,356
13,378
1
My wife and I just refuse to pay a certain amount for certain things so we are cutting back. The dirty side of inflation is the older guy who won't buy a new truck because he's not paying over sticker> I have a paid off Tacoma with low miles, the dealer begs me for the truck and promises a great deal but why bother? It has 68,000 on it. It'll last.
In the old days I might get a new one. Old days like two years ago. And that's part of the recession.
Paying over sticker price is stupid if you don't have to have a new car. Maybe it was on this board that I read an article about millennials that purchased high priced houses over the past couple of years. Seventy percent of them now regret having paid so much due to being so anxious to buy a house. Buying fixer uppers and buying homes not in the area they really wanted. Someday and maybe soon they'll be moving out to an apartment and dropping the house key off at the bank just like when the last bubble burst.
 

DJ Spanky

Well-Known Member
Jul 25, 2001
1,076
1,683
1
Spin baby spin. Of course this doesn't have anything to do with the current administration, does it?
 

MaconNitt

Well-Known Member
Oct 18, 2016
2,704
3,168
1
But, but, but Joe Biden almost caught up to Trump's Feb 2020 number of employed Americans.......

90% reduction in profit + shoppers pulling back = layoffs. Courtesy of Joe Biden.

https://www.cnn.com/2022/08/17/investing/target-earnings/index.html
lol. It must have killed you to use CNN as a source. No where in the article did it say layoffs are looming. In fact the CEO said they are seeing an encouraging start to the back to school season. They still made 183 million profit, and got burned with excess inventory.
 

MaconNitt

Well-Known Member
Oct 18, 2016
2,704
3,168
1
Lmao, self imposed. It's called mismanagement, and this is the result. They'll be no defending what's coming regarding food supplies and inflation. Keep preaching, professor. Most of us like in the real world, not bullsh&t marketing, book theory. We had this discussion before. The street rules, not your pathetic Penn State classroom.
LMAFO,

Do you realize that you just proved @fbh1 's point. You said it yourself mismanagement. Mismanagement is self imposed. They had 7 quarters in a row of profit growth. Getting caught with excess inventory in a multi billion dollar company should result in the firing of the CEO or at least the economic advisors.
 

Sullivan

Well-Known Member
Nov 24, 2001
16,973
13,014
1
You aren’t worth the effort. I’m done here however just to clarify… I sold all of my businesses for profit. Either you are totally ignorant or you are just trying to piss me off…. Again, believe what you want. I’m comfortable with what I’ve accomplished.

No, I don’t believe you.

Reading between the lines, SBA loan, retail, 6 different locations over 10 years, a fairly quick exit by you, and your desire to not tell the real story, I seriously doubt your business returned a worthwhile profit. Hence the reason you went into teaching.
 
Last edited:
  • Like
Reactions: Ski and 1Hammers1

LMTLION

Well-Known Member
Mar 20, 2008
2,651
2,767
1
No, I don’t believe you.

Reading between the lines, SBA loan, retail, 6 different locations over 10 years, a fairly quick exit by you, and your desire to not tell the real story, I seriously doubt your business returned a worthwhile profit. Hence the reason you went into teaching.
I have no dog in this fight, but I do not believe he is a professor. His writing style is remedial, even for a message board.
 
  • Like
Reactions: Sullivan

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
No, I don’t believe you.

Reading between the lines, SBA loan, retail, 6 different locations over 10 years, a fairly quick exit by you, and your desire to not tell the real story, I seriously doubt your business returned a worthwhile profit. Hence the reason you went into teaching.
You obviously know little about me or what my motivations were. In any case believe what you want. I’m content with what I’ve accomplished. Can you say the same thing? Sounds like you have difficulty grasping the simplest of concepts. You certainly don’t understand business.
 

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
I have no dog in this fight, but I do not believe he is a professor. His writing style is remedial, even for a message board.
I actually believe I write fairly well. Certainly a lot better than others on this board. I’ve already been outed by another obnoxious doxxing poster so you can argue with him whether I am a professor or not.
 

PSUEngineer89

Well-Known Member
Aug 14, 2021
5,221
8,515
1
I actually believe I write fairly well. Certainly a lot better than others on this board. I’ve already been outed by another obnoxious doxxing poster so you can argue with him whether I am a professor or not.
You do write well.

Your reasoning skills need.work.

Practically speaking, DC bureaucrats have been president since Trump surrendered with ”10 days to slow the spread”.

Obviously, Biden with his dementia, is not really president.

Reminder, Birx admitted that the second they got him to agree, she went to work on expanding it.
 
  • Like
Reactions: Sullivan

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
106,411
60,285
1
lol. It must have killed you to use CNN as a source. No where in the article did it say layoffs are looming. In fact the CEO said they are seeing an encouraging start to the back to school season. They still made 183 million profit, and got burned with excess inventory.

Nah, I think they've turned the corner. #BIDENFLATION has not though.

US retail sales were flat in July as inflation takes a toll​


https://abcnews.go.com/US/wireStory/us-retail-sales-flat-july-inflation-takes-toll-88490041

The pace of sales at U.S. retailers was unchanged last month as persistently high inflation and rising interest rates forced many households to spend more cautiously
 
  • Like
Reactions: Sullivan

fbh1

Well-Known Member
Gold Member
Jan 17, 2002
1,726
730
1
74
Bellefonte, PA
Nah, I think they've turned the corner. #BIDENFLATION has not though.

US retail sales were flat in July as inflation takes a toll​


https://abcnews.go.com/US/wireStory/us-retail-sales-flat-july-inflation-takes-toll-88490041

The pace of sales at U.S. retailers was unchanged last month as persistently high inflation and rising interest rates forced many households to spend more cautiously
First addressing Target's issue with profitability: From the NRF Smart Brief today... If you don't know what the NRF is you should find out. It is the leading authority of what is happening in the retail industry since it is the trade association of almost all of the major and minor retail organizations.


Target is ready to get back to its more profitable ways.
That was the message yesterday from CEO Brian Cornell on the chain’s second-quarter earnings call with analysts.

Mr. Cornell recapped that Target found itself earlier this year overstocked with merchandise in discretionary categories at a time when inflation was forcing consumers to concentrate their dollars on buying everyday staples.

“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,” he said.

Target’s decision to mark down overstocked categories may have cut into its second quarter profitability (down 90 percent year-over-year), but the move put it in a position to approach the second half of 2022 from a position of strength.

“We’ve meaningfully reduced our ownership and commitments in categories where we’ve seen softening demand,” said Mr. Cornell. “This has allowed us to strengthen our inventory position and in-stock position in the categories that are driving our growth, most notably in food and beverage, beauty and essentials.”

Target posted a 2.6 percent increase in sales for the quarter, marking 21 straight quarterly gains. The chain saw its customer traffic improve by 2.7 percent during the quarter, 20 percent higher than the same time in 2019.

“In raw numbers, that means in the second quarter alone, we’ve added more than 90 million guest visits over the last three years,” said Mr. Cornell. “These visits are a vivid demonstration of a deepening level of guest engagement resulting from multiple investments throughout our business. These investments include dozens of new stores and hundreds of remodels every year. They also include investments in our industry-leading same-day services, which have transformed our business in a short time.”


In addition, although July retail sales were flat with regard to June's sales... they were 10% higher than last (2021) July's sales. For those of you that do not know that much about retailing, those are referred to as comp sales which in this case were significantly better than last year.

I am not suggesting that we may or may not have a bumpy financial future... however, retail sales are still holding up. The key for retail organizations will be to be very sensitive to offering products at value prices. Wal-Mart is doing fine as are off-price retailers such as TJ MAX and Burlington. Very few retail organizations are panicking. As I stated in an earlier post, Target's profit results were self inflicted. They decided to swallow the pill all at one time rather than spreading it out over several quarters.


Again... from the Retail Smart Brief yesterday:

US retail sales were flat in July compared with the previous month and up 10.3% from July 2021, the Commerce Department reported Wednesday morning. Gas sales dipped 1.8% in the month, leaving consumers with more cash to spend on other goods like electronics, appliances and garden supplies, which all saw spending increases.

Contrary to some people's opinions... all is not gloom and doom.
 

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
106,411
60,285
1
First addressing Target's issue with profitability: From the NRF Smart Brief today... If you don't know what the NRF is you should find out. It is the leading authority of what is happening in the retail industry since it is the trade association of almost all of the major and minor retail organizations.


Target is ready to get back to its more profitable ways.
That was the message yesterday from CEO Brian Cornell on the chain’s second-quarter earnings call with analysts.

Mr. Cornell recapped that Target found itself earlier this year overstocked with merchandise in discretionary categories at a time when inflation was forcing consumers to concentrate their dollars on buying everyday staples.

“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,” he said.

Target’s decision to mark down overstocked categories may have cut into its second quarter profitability (down 90 percent year-over-year), but the move put it in a position to approach the second half of 2022 from a position of strength.

“We’ve meaningfully reduced our ownership and commitments in categories where we’ve seen softening demand,” said Mr. Cornell. “This has allowed us to strengthen our inventory position and in-stock position in the categories that are driving our growth, most notably in food and beverage, beauty and essentials.”

Target posted a 2.6 percent increase in sales for the quarter, marking 21 straight quarterly gains. The chain saw its customer traffic improve by 2.7 percent during the quarter, 20 percent higher than the same time in 2019.

“In raw numbers, that means in the second quarter alone, we’ve added more than 90 million guest visits over the last three years,” said Mr. Cornell. “These visits are a vivid demonstration of a deepening level of guest engagement resulting from multiple investments throughout our business. These investments include dozens of new stores and hundreds of remodels every year. They also include investments in our industry-leading same-day services, which have transformed our business in a short time.”


In addition, although July retail sales were flat with regard to June's sales... they were 10% higher than last (2021) July's sales. For those of you that do not know that much about retailing, those are referred to as comp sales which in this case were significantly better than last year.

I am not suggesting that we may or may not have a bumpy financial future... however, retail sales are still holding up. The key for retail organizations will be to be very sensitive to offering products at value prices. Wal-Mart is doing fine as are off-price retailers such as TJ MAX and Burlington. Very few retail organizations are panicking. As I stated in an earlier post, Target's profit results were self inflicted. They decided to swallow the pill all at one time rather than spreading it out over several quarters.


Again... from the Retail Smart Brief yesterday:

US retail sales were flat in July compared with the previous month and up 10.3% from July 2021, the Commerce Department reported Wednesday morning. Gas sales dipped 1.8% in the month, leaving consumers with more cash to spend on other goods like electronics, appliances and garden supplies, which all saw spending increases.

Contrary to some people's opinions... all is not gloom and doom.

Inflation is costing U.S. households an extra $341 a month. Here’s what’s more expensive and how you can save some money​


That #BIDENFLATION btw............ $341 a month the less off aren't spending at Target................

https://www.cnbc.com/2022/05/12/wha...lation-costs-families-extra-341-a-month-.html
 

Latest posts