Target's Four-Year Sales Stagnation | Fast Five Shorts
This segment from the Omni Talk Retail Fast Five podcast, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso, dives into Target's disastrous Q3 earnings.
While Walmart, TJX, Ross, and Best Buy raised their outlooks, Target's four-year sales stack turned negative—meaning zero growth since 2021. Chris argues Target is the "real turkey" of earnings season, while Anne questions what anyone expected during a CEO transition and 1,800-person layoff. Is this rock bottom or just the beginning of a longer turnaround? Tune in for the heated debate!
#target #retailearnings #walmart #targetvswalmart #discountretail #retailnews #earnings #retailanalysis
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Transcript
The last week saw a flurry of retail earnings announcements and here are some of the highlights.
Speaker A:Home Depot kicked everything off last week by cutting its earnings forecast.
Speaker A:Target then followed with a similar outlook while Walmart, tjx, Ross stores and Best Buy all raised their financial outlooks across the back half of the year.
Speaker A:Chris, what stood out to you most from this week's past earnings announcements?
Speaker B:Oh, we're coming in hot.
Speaker B:That and I, I don't know about you, but I'm going to zero right in on it and put a big bullseye on the bullseye itself.
Speaker B:Target, because Target was the real turkey of the past week.
Speaker B:It was without a doubt, sales were, sales were quite honestly atrocious.
Speaker B:Like I did the math.
Speaker B:Did you know the four year, not the two year, not the three year, but the four year quarter three stack is now negative.
Speaker B:The Q3 stack over four years is negative.
Speaker B:That means Target hasn't grown a stitch and in the last four years.
Speaker B:But in, when you put that story in context it's even more telling because like you said, like Walmart and all the discounters did fine.
Speaker B:Best Buy, which sells a hell of a lot of discretionary products, they also did pretty well and even Abercrombie, Kohl's and Gap did better than expectations.
Speaker B:So, so like what the heck, Target, I mean you're just standing out like a sore thumb in the landscape of earnings in my opinion.
Speaker A:Yeah, I mean I guess I would challenge you in saying like what was your expectation and all the retail analysts out there, I think it's EAS easy to kick Target while they're down, but they're in the middle of a CEO change.
Speaker A: They just laid off: Speaker A:Like what were we expecting this quarter's results to be?
Speaker A:If we're being honest with ourselves?
Speaker A:I think they've, yes, they've got a turnaround that they've got on their hands.
Speaker A:They've got a new CEO coming in place hopefully that will be working on that.
Speaker A:And I think some things even that they've started to push on which we'll talk about in the next headlines that are, that are showing that they are making some moves.
Speaker A:And I, I think you're right there.
Speaker A:It's clear, you know that because of Target's poor earnings this quarter, Walmart's getting their business for essentials.
Speaker A:You have tjx, Abercrombie and Gap who are getting their apparel business would be my guess.
Speaker A:And then HomeGoods again part of the TGX umbrella, who's getting the home interest from Those Target shoppers who have either left or are looking at other options right now.
Speaker A:But I mean, it really wasn't surprising to me.
Speaker A:I'm not expecting that we're going to see a banner year coming of quarter, sorry, coming of Target anytime soon because they're in this turnaround and I would expect that of any retailer I think in their similar position.
Speaker B:So, so, I mean, but basically.
Speaker B:So you're like, you're okay with it?
Speaker B:Like, see, to me it is a surprise because like it's the same regime, it's the same regime that you've handed over to.
Speaker B:So I would expect some improvement if you're believing in that regime.
Speaker B:And then the other point of it too is like Kohl's is in the same situation.
Speaker B:They have an interim CEO that's potentially doing better and just got named the full time CEO.
Speaker B:So like they're in the same exact situation and yet Target sticks out to me.
Speaker B:So I don't know.
Speaker B:Anything else you want to add there?
Speaker A:No, I think, I think it's just, you know, I, again, not expecting to see anything, any massive changes until new people get in the role, both at Kohl's with their new CEO and at Target.
Speaker A:I think you got to give them time to right the ship.
Speaker A:And I think that we'll start to see, see either whether those changes are happening with new leadership in place or if, if it's a bigger problem and, and if this consistency continues for the next four quarters, then yeah, then I, then I think I'm coming over to your side and I can understand.
Speaker A:But for right now, it was not surprising to me at all.
Speaker A:It just kind of was as expected.
