This morning, Target Corp. (NYSE: TGT) reported grim numbers for its fourth-quarter ended January 31. Profit dropped 41% to $609 million, or 81 cents per share (two cents below analysts' estimates). In the year-ago period, the discount chain banked $1.03 billion, or $1.23 per share. Revenue, meanwhile, dipped 1.6% to $19.02 billion (south of the Street's $19.5 billion consensus view), and same-store sales were down 5.9%. For fiscal 2008, profit dropped 22% to $2.86 per share and revenue edged 2.3% higher during the year to $62.88 billion. The stock has dropped nearly 3% in early trading and is within a chip shot of its 52-week low of $25.60.
In addition to crimped consumer spending, rising unemployment numbers and an unsettling economic landscape have created challenges for Target's credit-card business. The retailer's credit-card unit took a one-time, pre-tax loss of $135 million during the quarter as TGT had to add $245 million in reserves to cover delinquencies.
Beth Gaston Moon works for WeSeed.com, "The stock market for the rest of us." The above comments are not intended as trading or investment advice.











Reader Comments (Page 1 of 1)
2-24-2009 @ 12:41PM
marc said...
I have been noticing some strange developments at Target for a while now. For about the last two, three months Target stores seem to have been having issues with keeping stock on hand and lowing minimum stock.
The revenue collapse could also be related to people finally noticing that their claim to "expect more, pay less" does not translate to low prices. Only rarely are their items priced lower than most of their competitors. Their only edge... the variety and uniqueness of their offering is wider than all other mainstream big boxes. Will that help them through the future... No!
2-24-2009 @ 2:22PM
Pam said...
My husband and I used to joke about how we could never get out of a Target store under 100$. We switched over to Wal-Mart last summer and we’ve never looked back, because more often than not, we were walking out of Wal-Mart WAY under 100$, buying many of the same items.
The Target experience lately is very different than it has been in previous years. Stores aren't crowded anymore and the majority of shoppers are in the Express Lanes, buying the couple of advertised sale items (like we are) and nothing else. If they're sold out of items, don't expect them to replenish stock for quite a while. Price signs and sale signs are EVERYWHERE in the stores now, with signage all over trying to convince you you're getting a good deal.
Target has confessed to trying to maintain their margins, even in this difficult economic climate when people are living paycheck to paycheck. Their higher pricing bears this out, and it’s not surprising to see that their profits are down and people are going elsewhere to do their shopping.
2-24-2009 @ 8:43PM
gsan201 said...
I have a totally different outook then these guys.I kind of think they are Walmart stooges myself. I am not the biggest fan of Target having worked there myself but they do have much better clothing at really good prices then Wally World and their food prices are always on par with the surrounding stores including Wamart and Sam's that they Always price compare. Many times I will find food items cheaper then i can find at the places i shop and I am a bargain shopper!!Maybe these guys have bad Targets in their areas Who knows but don't be so bigoted or prejudice and stereotype Target for not have good prices because they do and they are not close to the mad house Walmart is.Many times i have just gone home when trying to shop at Walmart because either you coudn't buy something in Electronics because it is locked up or you have to wait in line for an hour + to pay for something(this is after the hour it takes to Park in the first place). Not wild about either store but for the things they both offer I would choose Target and other food items at your local grocery store are cheaper then Walmart with their loss leaders(taking a loss on an item to get u in but jacking up prices on other items i.e. peanut butter,soda,ice cream,etc.etc.)
3-01-2009 @ 12:26PM
FP said...
I was in a TARGET the other day for the first time in a year. There wasn't much stock and the store looked practically abandoned. I had a camcorder with me and I grabbed some video:
http://www.youtube.com/watch?v=TG0Rl9PgJYU&
4-17-2009 @ 5:50PM
Mike said...
I've been a loyal Target customer since the late 80's-early 90's when I discovered them as a grad student and yound professional. Early last year, I opened a Target Visa to get the 10% discount on a HDTV I was purchasing. Well, I just opened my credit card statement for this month and found that my credit limit had been decreased more than 95%. I called their customer service dept. and told that it was because I had been 3 days late on my last payment. When I objected and asked them to restore my credit limit, I was told that my card would be reviewed over the next six months and based on a number of things, they MIGHT decide to restore my card to its original limit.
Obvioulsy, this was not what I wanted and since the impact on my credit score will probably be the same either way, I decided to cancel the card instead of having the credit limit reduced so significantly. The customer service rep asked if I wanted to leave the card open to use only at Target and so that I could continue to earn their reward points. I told her that I didn't really feel like shopping at Target right now and that, if this is the way they treat their loyal customers, I would be spending my $ at Walmart. She gave me some line about hurting my community because Target gives 5% back to the community but she was unwilling to offer to restore my credit limit. I pay my bill in full each month and typically use the card only at Target so they don't make a ton of money off of me but as of today, they won't make anything at me!