![]() ![]() Last November, Target said it was slashing expenses with a goal of saving $2 billion to $3 billion over the next three years. In early June, Target warned that it was canceling orders from suppliers and aggressively cutting prices because of a pronounced spending shift by Americans. Target reported a 52% drop in third quarter profits, 90% in the second quarter and a 52% decline in the first. It was the fourth consecutive quarter that retailer’s profit has slipped. business comes from groceries that number is 20% at Target. Target has taken a bigger hit to its business compared to other big box retailers likely because it relies more on discretionary items like clothing and home furnishings. ![]() Inventory in categories like fashion was roughly 13% lower in the fourth quarter than a year ago. Still, Target said that shoppers are attracted to new and trendy clothing, and that’s a key reason for increased store visits.Ĭornell noted that the company entered the year in a “very healthy inventory position,” reflecting its conservative approach in discretionary items. Groceries typically have a much smaller profit margin. That was fueled by increased customer traffic, but customers are shifting their spending to necessities like food and paper towels over discretionary items like fashion. ![]() Target’s total comparable sales inched up 0.7% in the fiscal fourth quarter compared with a year ago. ![]()
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