Despite a 20th consecutive quarter of sales growth, Target stock sharply fell by more than 27% after a dramatic miss to the bottom-line for Q1. Like Walmart (earnings released day prior), Target executives attributed margin shortfalls to unanticipated volatility in consumer behavior, sales mix, inventory impairment/markdowns, and freight costs.
Target expects profitability to be challenged through Q2 with recovery forecasted in the back half of the year. Leaders placed emphasis on confidence in Target’s ability to maintain the long-term growth algorithm as Guests continue to show loyalty and as market share gains continue in core categories.
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