Target misses the mark


Target’s latest results and outlook for the second quarter did not meet Wall Street’s bull’s eye. And that’s leading to more worries about whether consumers are tapped out.

Target stock fell 7% in early trading Wednesday after the retailer reported sales that missed forecasts. Target also warned that its sales and earnings for the second quarter would be lower than what analysts were expecting.

Overall sales were down 5% in the quarter, but that was largely due to Target’s sale of its in-store pharmacies to CVS.

There was some good news. Target’s earnings rose 16.5% from a year ago and topped Wall Street’s estimates. Digital sales surged 23% as well.

But the weak guidance is the story.

Target CEO Brian Cornell said in a statement that it is “in an increasingly volatile consumer environment” for retailers and added that it is “a challenging short-term consumer landscape.”

Target is the latest prominent retailer to disappoint investors. Macy’s, Kohl’s, J.C. Penney and Nordstrom also reported underwhelming results recently.

Still, there are pockets of strength in the sector. Amazon is booming and its stock is near an all-time high. Specialty retailers like Home Depot, TJX and Children’s Place all reported solid results this week as well.

Investors won’t have to wait long for yet another reading on the health of consumers. Walmart will report its first quarter results on Thursday morning. The numbers may not be pretty. Analysts are expecting a drop in revenue and profits from a year ago.

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