Target said the costs related to the moves will hurt the bottom line in the current quarter. Target also announced that it will add five distribution centers over the next two fiscal years. Sales of big TVs and small kitchen appliances that Americans loaded up on during the pandemic have faded, leaving Target with a bloated inventory that it said must be marked down to sell. Target reported last month its profit for the fiscal first quarter tumbled 52% compared with the same period last year. The speed at which Americans pivoted away from pandemic spending was laid bare in the most recent quarterly financial filings from a number of major retailers. That’s a change that arrived much faster than major retailers had anticipated. Shoppers are also focusing more on non-discretionary items like groceries as inflation makes them more selective. The actions, announced Tuesday, come after a pronounced spending shift by Americans, from investments in their homes to money spent on experiences like travel and nights out for dinner and other pre-pandemic routines. Walmart, Nordstrom and Macy's fell between 2% and 4%.NEW YORK (AP) - Target is canceling orders from suppliers, particularly for home goods and clothing, and it’s slashing prices further to clear out amassed inventory ahead of the critical fall and holiday shopping seasons. fell 9% to $145.30 in premarket trading Tuesday and the stock of other retailers retreated with it.
Target now expects its second-quarter operating margin rate will be roughly 2%, down from around 5.3% it had expected last month. The Associated Press reports that since Target is also facing sharply higher costs for everything from labor to transportation and shipping, and it will offset price cuts where it can with higher prices for goods now in demand, like food, groceries, makeup and beauty. What Kinds of Items Will be More Expensive? In aggressively clearing out unwanted goods, Target wants to make room for what is now in demand - including groceries and makeup products. What Kinds of Products is Target Stocking Up On? Many of the orders for products being canceled have a long production lead time of nine months, he said. In some cases, some of the raw materials that were meant for some goods will instead be used for other products in higher demand, Fiddelke said. With Americans now looking to wear dressier clothing for nights out on the town and meals out of the house, items in those categories are no longer in demand. The Associated Press reports that Target is particularly canceling orders from suppliers on home goods and clothing. We determined that acting aggressively was the right way to continue to fuel the business." What Kinds of Items is Target Canceling Orders on?
”And they certainly are for us, in some of the categories that we misforecast. “Retail inventories are elevated," Michael Fiddelke, Target's chief financial officer, told The Associated Press in a phone interview Monday. The Associated Press reports that with sales of large electronic items like TVs, and small kitchen appliances decreasing, Target is now left with a bloated inventory that it said must be marked down to sell.
However, consumer spending shows that the rush to stay at home and spend time time cooking indoors has waned. Peak fall foliage likely to look different in 2023 due to continued drought
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