Finimize - 🎯 Target missed the mark

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Today's big stories

Target’s third-quarter earnings were well off the mark, sending its shares into a tailspin
Here are four ways you could invest for the next ten years – Read Now
Inflation in the UK was still rising in October, but markets kept their cool

Off-Target

What’s Going On Here?

Target announced results on Wednesday that were miles off a bullseye.

What Does This Mean?

Walmart’s results on Tuesday made one thing clear: shoppers with less cash to splash want everyday groceries at bargain prices. That meant Walmart’s staple items like cheap food and drink – which make up over half of its total wares – were in high demand last quarter. But the same can’t be said for poor Target: the department store chain mainly sells nice-to-haves like clothing and electronics, and savvy shoppers often hold off on buying that stuff till seasonal discounts kick in. That difference showed in the books: Walmart made expectation-beating profit, while Target’s was much lower than investors expected.

Why Should I Care?

Zooming in: Line your pockets.
It wasn't all bad for Target: the firm’s third-quarter sales at stores open for at least a year were up a better-than-expected 2.7% from the same time last year. Problem is, Target had to slap massive discount signs across the aisles to get folk to the checkouts. Those discounts squeeze the life out of a firm’s profit margins, which – along with the promise of future clearances – pushed Target to admit it’ll fall well short of its profit promises made earlier this year. On top of that, the retailer said it’ll lose nearly $400 million – worth 5% of last year’s profit – at the hands of shoplifters (tweet this). Now that’s a scapegoat you won't hear often...

Zooming out: Nobody knows nuthin’.
You’ll often hear that it’s best to take the long-term view when it comes to stock picking, and that's partly because markets usually do a good job at predicting and “pricing in” short-term changes. But in times of high uncertainty, the market’s close-range antenna can falter and investors end up caught unawares, causing shock price movements. Your common sense can help you rise above the rest, mind you: it’s hardly surprising that Target would lose customers to cheaper rivals during tougher times, after all.

You might also like: Fast fashion is out. Pre-owned fashion is in.

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Analyst Take

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Disclaimer

This content is for US investors only, if you are not a US investor please ignore this content. This content is a paid advertisement for Upexi (NASDAQ: UPXI) from Interactive Offers and Finimize. This is not Finimize editorial content. Finimize received a fixed fee for producing, hosting and promoting this content on behalf of Upexi, totalling $23,000. Other than the compensation received for this service, Finimize and its principals are not affiliated with either Interactive Offers or Upexi. Finimize and its principals have no ownership in Upexi. The content on this page should not be taken as advice, an endorsement, or a recommendation from Finimize and its principals to buy or sell any security. Finimize and its principals have not evaluated the accuracy of any claims made on this page. Finimize and its principals recommend that investors do their own independent research and consult with a qualified investment professional before buying or selling any security. Investing is inherently risky and capital is at risk. Past performance is not indicative of future results.