Target Is Rapidly Deteriorating Before Our Eyes, And It’s Worse Than You Realize

Target seems to be facing a never-ending nightmare. Since early 2022, its financial performance has been disappointing executives and investors alike, and it’s been raising alarms cross the entire retail industry. How one of the biggest American companies can sustain itself if sales are falling all across the board quarter after quarter?
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In fact, just a few months ago, Target revealed that it faced the first full-year decline in sales in a long time. This means the retail giant has faced acute losses for four quarters in a row in 2023, and it's on track for a repeat in 2024 as inflation-weary shoppers cut back on discretionary purchases, which accounts for more than half of Target's merchandise.
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The retailer is now taking desperate measures to save its business, but that may not be enough to prevent its imminent downfall. The chain continues to close multiple locations using excuses that do not stick anymore. Something far more disturbing is behind Target’s woes. Target is a barometer of the American consumer. When shoppers are struggling financially, it shows on the retailer's bottom line. In October, the chain reported that, in 2023, it faced its first full-year of sales declines in seven years.
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Between Q1 and Q4 sales dropped by an average of 3.7% per quarter, a very concerning development considering that, in 2022, sales growth was already dismal, at just 0.8% year-over-year. In that year, the company lost money in all four quarters, but not mainly due to lower sales volumes. Target was forced to take a profit hit as it slashed prices for thousands of items consumers were not interested to buy.
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The industry titan saw profits dropping by 49% in Q1, 90% in Q2, 54% in Q3, and 52% in Q4. That cost the chain an estimated $8 billion, according to retail experts. Now, CEO Brian Cornell is predicting a sluggish 2024 given that economic conditions have further deteriorated Americans purchasing power.
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Target's middle-class customer base has been strained by higher prices over the past couple of years, leading many to pull back on discretionary goods. So far in 2024, Target’s sales have declined for three straight quarters, hinting that it might end in the red for yet another year. Investors are panicking about the prospect of another unprofitable quarter, and they have been dumping Target stock at an unprecedented rate. The company's shares have dropped by 43% since its peak.

Source: https://www.youtube.com/watch?v=9nltyG9bBaY