Most notably, he built the systems needed to offer consumers what is dubbed omnichannel - the ability for consumers to buy goods in-store, online with store pickup or delivery to their homes. That’s because Cornell made improvements across Target’s business. Target stock sank 13% to $58.īy October 2019, its shares had tripled. In February 2017, he announced a terrible quarterly result and a package of store improvements and other initiatives that would require $7 billion in capital spending and $1 billion in operating expenses over three years. As I wrote in October 2019, he excels at facing problems squarely and taking practical steps to solve them.įor example, when he took over in mid-August 2014, Target was barely growing, struggling to recover from a massive consumer data breach and distracted by a disastrous expansion into Canada. I have been favorably impressed by Target’s CEO since 2014 - Brian Cornell. This Could Be An Opportunity To Buy Target Stock Meanwhile, oil - which accounts for about 10% of CPI - has risen 70% in 2022, according to Barron’s. For example, the service sector - such as airplane tickets - accounts for some 60% of the CPI and in April airfares rose 18% from March. As Barron’s wrote, “Goods excluding food and energy account for about 22% of the consumer price index.Less than one fifth of the CPI is seeing markdowns.”Ī bigger portion of the CPI is still experiencing big price increases. Sadly for those hoping that markdowns will reduce inflation, the goods seeing markdowns only account for about 20% of the consumer price index. What remains to be seen is whether discounts to clear excess inventory will reduce the general level of prices in the economy and convince the Fed to back off its interest rate increases. While price cuts will reduce retailers’ operating profits, they “could be a boon for shoppers facing rising prices for food, fuel as well as other goods and services.” After all, as the Journal wrote, “The rise of inventory is likely to lead to more discounts, something retailers had avoided during the product scarcity of the pandemic. In theory, discounting excess inventory could lower inflation. Specifically, Wayfair could have more furniture in stock than consumers want to buy and Best Buy may have excess electronics inventory. It also strikes me as likely that retailers that specialize in categories which Target is discounting are likely to suffer the same fate. Other retailers with much higher inventory levels included Walmart - inventory rose 33% in the last quarter and Kohl’s - inventory up 40%. Target is not alone in suffering a buildup of inventory that consumers are not eager to buy.
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