OAN Staff James Myers
8:18am – Wednesday, November 20, 2024
Target's financial results on Wednesday were well below Wall Street's expectations, and the major retail chain blamed the decline on lower-than-expected demand.
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The company announced profits were 20% lower than expected, its biggest failure in the past two years. Revenue also fell short of expectations for the first time in more than a year.
The negative results come despite a much-publicized campaign offering discounts on thousands of products as consumers have grappled with price inflation over the past few years.
Target CEO Brian Cornell said on a call with reporters that the quarter's misery was related to “continued weakness in the discretionary sector” and preparations for the October port strike. He said it was because of cost.
“We are disappointed that the combination of slowing discretionary demand and some cost pressures has caused us to lower our outlook after raising it last quarter,” Target Chief Operating Officer Michael Fidelke said in a statement. added.
However, although Target lowered its profit and sales targets for this year, Fidelke said the company remains confident in its long-term outlook.
Target's stock price plunged 15% in pre-market trading following the announcement, as a result of the poor performance.
Additionally, Target's report came just a day after rival Walmart reported better-than-expected earnings and sales.
Walmart noted that despite the better-than-expected results, rising prices for food and other items meant customers were still holding back on purchases in search of attractive deals.
“We expect this holiday period to be very consistent with that,” said John David Rainey, Walmart's chief financial officer. CNBC. “They are focused on price and value.”
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