Target’s shares tumbled after the retailer warned in its latest earnings report that U.S. shoppers are pulling back, slamming profit and dimming the outlook.
Adjusted earnings tumbled to US$1.54 a share in the fiscal third quarter, the company said Wednesday. That was below the lowest analyst estimate.
The shares plunged 15 per cent in premarket trading. Target slumped 23 per cent this year through Tuesday, worse than the 16 per cent drop in the S&P 500 Index. The difficulties will linger into 2023, Chief Financial Officer Michael Fiddelke said in a briefing with reporters, without offering financial details. The goal of Target’s long-term efficiency plan is to save US$2 billion to US$3 billion over the next three years, and the company is reexamining everything from how it acquires apparel to how it handles digital orders. In the third quarter, operating profit totaled 3.9 per cent of sales, Target said.
Additional blows came on two other fronts last quarter. One was the cost of managing inventory that arrived earlier than expected as supply-chain snarls improved, a problem Fiddelke said he welcomed as preferable to last year’s shortages.
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