Target Is Dying Before Our Eyes As Perfect Storm Hits America’s Biggest Chains

Target is in far more trouble than people realize. New evidence shows that the popular retailer is now dying before our eyes as a perfect storm of events strikes America’s biggest chains. Facing a $400 million shortage in cash flow, declining sales, plummeting profits, and crashing shares in the stock market, the company is hanging by a thread. To make things worse, supply chain imbalances and bloated inventories are still forcing Target to mark down prices of several items due to lower demand, which is further depressing its bottom line. At this point, the store chain looks like the next perfect victim to the unforgiving retail apocalypse. And in today’s video, we compiled several worrying numbers that reveal just how ugly conditions are for this beloved retailer.
Right now, Target is undoubtedly the one coping with the hardest challenges after an extremely turbulent 2022. In its latest press conference, Target described the current environment as “very challenging” as its shoppers aren’t being attracted by the discounted products the company needs to sell before bringing forth new merchandise. “We’re competing in a constrained environment for consumer spending,” said CFO Michael Fiddelke.
The most worrying numbers released by the brick-and-mortar retailer showed a 43% drop in profits, and lower-than-expected sales for the holiday quarter, reflecting its ongoing problems of cautious consumer spending and higher operational costs. That marked Target’s fourth straight quarterly profit drop. In 2022, it faced a 40% decline in profits in the first quarter, while earnings plummeted nearly 90% in the second quarter and 52% in the third fiscal quarter.
It is estimated that the company has lost about $1.2 billion over the past 12 months alone. And part of the blame can be attributed to its chaotic supply chains. For that reason, Target forecasts annual earnings of just $7.75 per share, below investors’ estimates of $9.23, Refinitiv data shows. “We’re planning cautiously given the economic challenges we anticipate this year,” said Target Chief Executive Brian Cornell.
The financial sector is reacting accordingly. On Wednesday, Wells Fargo published a very gloomy analysis discussing the future of the retailer amid “a murky consumer backdrop,” which led the bank to downgrade Target’s stock last week. Analyst Edward Kelly lowered his rating for Target shares to Equal-weight and cut his price target to $142 from $170. “Target’s outlook has deteriorated meaningfully and we no longer see it as an attractive investment into an uncertain 2023,” the analyst wrote in a research note.
On the other hand, loyal customers may only have a few weeks left before Target closes several stores across the country. Given the myriad of issues it is facing right now, the company is being seen by industry experts as the next perfect victim of the retail apocalypse. Retail is an industry in transition, and if stores and chains are not able to adapt to new market conditions they will face a grim future. Sadly, Target isn’t standing on solid ground as most people would assume. The decay of this popular retail chain looks like a slow-motion train-wreck that is happening in plein sight. What lies ahead is still anyone’s guess, but considering all of the red flags, it feels like the worst is yet to come.

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