Photo: Scott Olson / Getty Images
Target earnings fell by 52% during the first quarter of the year, according to the retail giant’s report released this Wednesday.
Wall Street expected a report with green numbers; however, data reported by Target caused its stock to plummet to 25% at the opening of operations this Wednesday.
This would be the worst level in the value of Target shares not seen since 1987, according to a report published by CNN.
Target explained that the resounding drop in earnings for the first three months of the year was mainly due to to higher expenses attributable to persistent supply chain problems.
However, the retailer also found that shoppers have stopped spending on non-essential products due to fears already aroused by inflation, which stood at 8.3% last April, according to the report from the Bureau of Labor Statistics.
“We face unexpectedly high costs, driven by a number of factors, resulting in profitability well below our expectations and well below where we expect to operate over time.” Target CEO Brian Cornell said in the statement.
According to the CEO, consumers continue to spend on everyday staples like food, beverages and beauty items; however, have stopped buying more expensive items such as televisions or exercise equipment.
The bad news from Target caused a wave of declines in the opening of operations, with a drop of almost 550 points in the Dow and a 2% drop in the S&P 550.
The retail market was also shaken by the report: Dollar Tree, Dollar General, Tractor Supply, Costco and Best Buy, all lost on the index this morning.
Target isn’t the only one with bad news in the big-box retail market this Tuesday, though. , Walmart also released a quarterly report that alerted the specialists.
This Tuesday, Walmart had its worst day in the value of its shares is in the last 35 years, after a low profit report and a weak outlook generated by an increase in shipping and labor costs.
You may also be interested in: – Buyers are putting more than twice as much as a year ago for a down payment on a home in the US– Target store workers join Starbucks and call for a union vote– Cup Noodles, the popular noodle brand, launches a special makeup collection