Target experienced a slim sales increase in the third quarter, with profits declining due to reduced spending from inflation-weary customers and costs related to a dockworker strike in October impacting results.
The company fell short of Wall Street expectations for the quarter as consumers are being more selective in their spending habits despite the holiday season.
The big picture: Target’s performance contrasted with rival Walmart and Amazon, with its shares plummeting nearly 21% in morning trading following the weak quarterly results.
- Despite challenges, there were some bright spots for Target, including a slight rise in comparable sales and an increase in digital sales, driven by their loyalty program and same-day delivery service.
- Target faced operational challenges due to the dockworker strike and is adapting to potential tariffs on goods from other countries, focusing on diversifying its supply chain.
State of play: To boost sales, Target has lowered prices on thousands of items, including offering a $20 Thanksgiving meal bundle and featuring affordable toys for the holiday season. Additionally, the company introduced a new paid membership program called Target Circle 360 to enhance the shopping experience and compete with Walmart and Amazon.