Target, the American retail giant, lowered its financial forecast for the fiscal year on Wednesday, citing uncertainties in consumer demand, operational models, and tariff impacts.
The company’s sales have been sluggish for the past year, and the situation worsened in the three months leading up to May 3, with comparable sales dropping by 3.8%, exceeding analysts’ expectations.
Target’s CEO, Brian Cornell, expressed dissatisfaction with the results during a press conference call, stating, “We are not satisfied with this outcome and are well aware that we have opportunities to accelerate progress on our growth trajectory.”
Despite lower-than-expected sales, Cornell noted some highlights for the quarter, including healthy growth in digital businesses.
Cornell attributed part of the sales decline to weak discretionary spending on optional goods and a general decline in consumer confidence. He emphasized that despite increased costs due to tariffs on imported goods, Target plans to minimize price increases through negotiation with suppliers, expanding product categories, adjusting order timings, shifting production to other countries, and implementing price adjustments when necessary to offset tariff-related costs.
He emphasized, “Price is the last resort.”
At an investor day in March, Target executives expressed hopes of revitalizing the chain’s “magic” (Tarzhay) through new product launches, enhancing private labels, and improving the shopping experience.
Cornell revealed Target’s plans to introduce thousands of new and interesting products into its product line and has assembled an executive team focused on “accelerating” growth by realigning some executive responsibilities for faster implementation.
According to Target’s first-quarter performance released on Wednesday, its earnings per share (GAAP) stood at $2.27, surpassing the expected $1.64.
Cornell stated, “In the first quarter, our team forged ahead in an extremely challenging environment and focused on providing our customers with the outstanding assortment, experience, and value they expect from Target.”
(The article is referenced from The Wall Street Journal.)