NEW YORK (CNN Business)Target reports second-quarter earnings plummeting 90%, well below expectations Did. Exhausted customers refrained from spending on non-essential items.
Retailers, including Target, are forced tomark downcommon items such as clothing, electronics and home goods due to overstocking . Consumers had to shift more spending to more expensive food and gasoline. However, Target reports that the price cuts had little effect. Inventory he ended the quarter up 1.5% from three months ago and up 36% from a year ago.
The company said it has reduced the amount of discretionary items it keeps in warehouses, but Target said sales of these items are "putting significant pressure on our near-term profitability."
Target's net income fell to $183 million from $1.8 billion in the prior quarter. The company's $26 billion revenue was up 3.5% from a year ago, broadly in line with expectations.
After seven quarters of strong earnings growth, this marks his second straight quarter of sharp declines, but the decline is far from last quarter's 40% decline. is higher than
Target's disappointing results are far ahead of its larger rivals Walmart (WMT)This was in contrast to the excellent results in Earnings reported on Tuesday were only slightly down from a year earlier. But Walmart also said it expects an 8% to 10% decline in annual revenue, though not as sharply as previously forecast.
Target (TGT) shares fell 3% in premarket trading on this news .
