The Clap
Target (NYSE: TGT) missed expectations in its Q3 earnings as consumer spending decreased in the past quarter.
What
In addition to lower-than-expected earnings, Target slashed its forecast for the upcoming holiday season, with the company willing to offer big discounts to attract customers and get rid of excess inventories.
So What
Inflation has burdened retail companies this year, causing uncertainty for the upcoming holiday quarter and how consumers will behave during this period.
Target’s revenues come mainly from consumer discretionary goods, while Walmart (NYSE: WMT) collects a large portion of its revenues from groceries, which justifies Target’s poor earnings compared to Walmart.
Now What
The company is looking to cut $2 billion in costs at the very least over the next three years, by more efficiently running processes inside the company.
