Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Target’s Turnaround Plan Takes a Toll on Profit

The retailer is spending more on delivering online orders as part of its push to catch up in e-commerce.
Target store | Source: Shutterstock
By
  • Bloomberg

NEW YORK, United States — Target Corp.'s bid to overhaul the company and better compete with Amazon.com Inc. and a resurgent Walmart Inc. is taking a toll on profit.

The retailer posted fourth-quarter earnings that fell short of analysts’ estimates. Target also is spending more to deliver online orders — part of its push to catch up in e-commerce.

The results threatens to renew the debate over whether a $7 billion turnaround plan by Chief Executive Officer Brian Cornell is coming at too high a price. While new brands and store remodels have helped revive the retailer’s “Tar-zhay” cachet, the investments are squeezing earnings. And the company has been further constrained in recent months by a wage hike in October.

The shares fell as much as 4.7 percent to $71.60 in premarket trading after the earnings report was released.

ADVERTISEMENT

The good news is Target’s sales are improving, helped by stronger traffic in stores and online. On a comparable basis, they grew 3.6 percent last quarter -- better than the 3.4 percent estimate. Profit came in at $1.37 a share during the period, excluding some items, a cent shy of Wall Street projections.

Target expects adjusted earnings of $5.15 to $5.45 a share this year, reiterating a forecast it delivered in January.

By Matthew Boyle; editors: Crayton Harrison and Nick Turner.

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Financial Markets
A financial lens on the fast-changing fashion sector, including markets, investors and deals.

The Best of BoF 2023: Diversity’s Litmus Test

In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.


The Year Ahead: The Future of Fashion Deal-Making

For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.


The Investment Giant Behind Some of Fashion’s Biggest Deals

L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
BoF Professional - How to Turn Data Into Meaningful Customer Connections
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
BoF Professional - How to Turn Data Into Meaningful Customer Connections