On Wednesday, Target reported a wide first quarter earnings miss as cost increases in areas such as freight and inventory surged. According to Bloomberg data, the profit shortfall marked the first miss for Target, versus analyst estimates since the third quarter of 2018,
“We are less profitable than we expected or intended to be,” said Brian Cornell, CEO.
He continues that ‘’These costs continue to rise almost on a daily basis and there is no indication at the moment that it is going to decrease over time.’’
The company predicted that the annual operating margin would be approximately 6% compared to a previous estimate of 8% or higher, and stressed that increased fuel and transportation costs would add $US1 billion more to annual costs than originally was expected.
The quarterly gross margin fell to 25.7% from 30% as the retailer was forced to sell some products such as kitchen appliances and TVs at reduced prices due to low demand amid pressures on supply chains.
The company’s net profit fell 52% to $ 1.01 billion, while if the exceptions are deducted, the retail company gained $ 2.19 per share, well below estimates of $ 3.92