Target shares fall 9% as it expects squeezed profits from aggressive plan to get rid of unwanted inventory - 07 iunie 2022

Target (US.TGT) warned investors Tuesday that its profits will take a short-term hit, as it marks down unwanted items, cancels orders and takes aggressive steps to get rid of extra inventory. The retailer slashed its profit margin expectations for the fiscal second quarter to account for a wave of goods winding up deeply discounted or on the clearance rack. Shares fell more than 9% in premarket trading following the news. Retailers from Walmart (US.WMT) to Gap (US.GPS) face a glut of inventory as inflation-pinched shoppers skip over categories that were popular during the first two years of the pandemic. Gap, for instance, said customers want party dresses and office clothes instead of the many fleece hoodies and active clothes the company has. Walmart said some families are making fewer discretionary purchases as the prices of gas and groceries rise. Abercrombie & Fitch (US.ANF) and American Eagle Outfitters (US.AEO) both reported a steep jump in inventory levels, up 46% and 45%, respectively, from a year ago from a mix of items not selling and supply chain delays easing.

https://www.cnbc.com/2022/06/07/target-markdowns-plan-to-cut-inventory.html