Target (NYSE:TGT) is trying to create some holiday magic for shoppers.
The big-box retailer is looking for some of its own magic, too. The holiday shopping period has become higher stakes for Target, after it put up disappointing earnings results for three quarters and cut its forecast for the current one. Excess inventory has dragged down the company’s profits, as sales have slowed.
Target is competing in an environment where retailers must work harder to get inflation-weary consumers to spend. Its huge COVID pandemic gains are at risk as middle- and upper-income shoppers spend money on other expenses, such as commuting, vacations, and sending kids to piano lessons and soccer camp. Many already replenished their closets and sprung for big-ticket items like flat-screen TVs, leaving fewer items on the wish list. And even wealthier households are turning to discounters like Walmart, which are known for cheaper groceries.
Target has a market value of around $66 billion, and it has a lot on the line. Shares of Target has fallen more than 37% so far this year. That stock slump came after Target in May missed fiscal first-quarter earnings and in June warned it would take a hit to profits as it marked down merchandise.
Target is also trying to cut through the noise of a more promotional holiday season. The big-box player, which has a reputation for cheap chic, has struck exclusive deals with brands and created its own fresh merchandise.
TGT shares fell $1.35, or 1.4%, to $142.70.
