4 Factors Dragging Down Target's Profits
Target (NYSE: TGT) is one of the few retailers seeing their businesses boom amid the coronavirus pandemic. In an update to investors, management said same-store sales increased more than 7% quarter to date. That's driven by over 100% growth in online sales while in-store sales have dropped slightly. Online sales have picked up momentum in April, up over 275% so far this month.
But while sales are booming for Target, management says it's seeing pressure on its profitability, claiming various factors will weigh on its operating margin to the tune of over five percentage points. Management declined to provide any specific earnings estimates for the quarter ending this month, but investors shouldn't expect the surging sales to translate into huge profit growth for the company.
Here are four factors weighing down Target's profits amid the coronavirus pandemic, and how investors in Target as well as competitors Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) should think about them.
Source Fool.com
