Is Target About to Enter a Slump?
Target (NYSE: TGT) stock got clobbered on Wednesday after releasing a less than spectacular earnings report. The sell-off, though, wasn't only due to a quarter that's already passed; it highlights fears about how ongoing issues, specifically inflation, will affect the company -- and retailers generally -- in the near future. Target stock sank 25% after the release. Are investors in for a Target slump?
The pandemic definitely isn't over, but Target's fabulous growth over the past two years has come to a screeching halt. Sales increased 4% year over year in the fiscal 2022 first quarter (ended April 30), including a 3.3% increase in same-store sales. In addition that deceleration, profitability was also highly pressured. Earnings per share (EPS) almost halved from $4.17 last year to $2.16 this year. Meanwhile, Target's operating margin of 5.3% was well below expectations for 8% or higher.
Image source: Target.
Source Fool.com
