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Topline
Shares of Target collapsed Tuesday after the brick-and-mortar retailer announced its profits will take a hit this quarter as it ramps up discounts to cut back on rising inventory—adding to concerns looming over the retail industry as consumers fed up with rising prices shift spending habits away from discretionary items.
The retailer says it will start canceling orders and ramp up discounts to fight supply chain … [+] constraints and ease excess inventory.
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Key Facts
Target stock plunged 8% to less than $148 as markets opened Tuesday—pushing shares near their lowest point in nearly two years after the company said it would take several actions in the second quarter—including markdowns, removing excess inventory and canceling orders—to help ease supply chain constraints and curb the impact of rising prices.
The company expects the measures will hurt profitability this quarter, saying its operating margin will likely be around 2%—far less than the 6% it expects for the back half of the year.
The plunge comes less than a month after shares crashed 30% after the company reported earnings that fell “well below” expectations due in part to higher freight, transportation and inventory costs, with CEO Doug McMillon saying the firm has ramped up discounts to help spur sales.
This is a developing story. Please check back for updates.
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