Target tries to dig out of its retail hole
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Target Wednesday morning reported its biggest earnings-per-share miss in two years and its first revenue miss since last summer, CNBC notes.
Why it matters: The company's massively disappointing third quarter underscores the retailer's own challenges and clashes with the rosy picture Walmart painted yesterday of the American consumer.
Zoom in: Compared to its rival's results Tuesday, it's clear that Target's efforts to bring back customers through price cuts haven't moved the needle enough.
By the numbers: Target managed to draw out a tiny 0.3% increase in comparable sales last quarter, but that fell short of the 1.5% analysts had projected.
- The company also reduced its full-year profit guidance — three months after lifting it.
- Walmart, on the other hand, saw a 5.3% jump in same-store sales and raised its outlook.
Context: Walmart's upper hand in grocery continues to help it win foot traffic, which in turn helps generate greater sales of discretionary goods in stores.
- Target, meanwhile has been trying to play catch up in food and on price cuts.
Between the lines: Walmart's lead makes Target's task even harder and more critical as Americans' fatigue from inflation lingers.
What they're saying: Consumers are still cautious with their spending and trying to maximize their budgets, Target CEO Brian Cornell and Walmart CFO John David Rainey, respectively, told analysts this week.
What we're watching: Target's stock plummeted 21% Wednesday and are down 15% year-to-date.
- Walmart shares are up more than 64% on the year.
