![]() The Associated Press reports that with sales of large electronic items like TVs, and small kitchen appliances decreasing, Target is now left with a bloated inventory that it said must be marked down to sell. However, consumer spending shows that the rush to stay at home and spend time time cooking indoors has waned. The company continues to expect full-year revenue growth in the low- to the mid-single-digit range and expects to maintain or gain market share in 2022.Peak fall foliage likely to look different in 2023 due to continued drought When it reported first-quarter results on May 18, Target said it anticipated its operating margin rate would be roughly around its first-quarter operating margin rate of 5.3 percent.įor the back half of the year, Target expects an operating margin rate of around 6 percent, a rate that would exceed the company’s average Fall season performance in the years leading up to the pandemic. In light of the decisions announced and based on the company’s current expectations for the economy and consumer environment, Target now expects its second-quarter operating margin rate to be around two percent. While these decisions will result in additional costs in the second quarter, we’re confident this rapid response will pay off for our business and our shareholders over time, resulting in improved profitability in the second half of the year and beyond,” said Brian Cornell, chairman and chief executive officer, Target Corporation. ![]() The additional steps we are announcing today will ensure that we deliver for our guests while driving further growth. Since we reported our first-quarter results, we have continued to monitor external conditions and have determined the necessary actions to remain nimble in the current environment. “Target’s business continues to generate healthy increases in traffic and sales, despite sustained volatility in the macro-environment, including shifting consumer buying patterns and rapidly changing operating conditions. The actions announced today result from the company’s ongoing assessment of current industry performance, the operating environment and consumer trends. Finally, the company continues to build additional capacity in its upstream supply chain to support future growth by adding five distribution centers over the next two fiscal years. The company is also pursuing aggressive options to control costs, including working with vendors to offset inflationary pressures, driving continued operating efficiencies and reducing costs while preserving a robust customer experience. Specifically, it plans to strengthen in frequency categories, including Food & Beverage, Household Essentials and Beauty, with more conservative plans in discretionary categories like Home, where trends have changed rapidly since the beginning of the year. ![]() The company will also accelerate work in flight, including revisions to sales forecasts, promotional plans and cost expectations by category. ports to add flexibility and speed in the portions of the supply chain most affected by external volatility, pricing actions to address the impact of unusually high transportation and fuel costs and working with suppliers to shorten distances and lead times in the supply chain. The action plan also includes the incremental holding capacity near U.S. The discounter said the actions build on the company’s record of growth and market-share gains. Target lowered its forecast for the second quarter as it plans to markdown merchandise, remove excess inventory and cancel orders to right-size its inventory levels.
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