TGT warns investors that profits will drop more

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Target Warns Profit Will Drop Because It Has Too Much Stuff

WSJ

Target Corp. TGT -0.85%? warned profits would drop because it needs to cancel orders or offer discounts to clear out unwanted goods, the latest sign of the sudden mismatch between supply and demand inside America’s stores.

Big re­tail­ers ben­e­fited over the past two years from the pan­demic rush to buy pa­tio fur­ni­ture, lap­tops and home dé­cor, as shop­pers were buoyed by sav­ings and gov­ern­ment stim­u­lus checks. Now many of those same stores are grap­pling with a swift re­ver­sal of buy­ing be­hav­ior with con­sumers spend­ing less on goods in fa­vor of ser­vices and ne­ces­si­ties such as food and fuel.

Two weeks af­ter re­port­ing lower-than-ex­pected prof­its, Tar­get said Tues­day it will fur­ther re­duce some of its profit es­ti­mates for the year be­cause it will more quickly un­load ex­cess in­ven­tory in the cur­rent quar­ter. Tar­get said last month in­ven­tory rose 43% in the most re­cent quar­ter as de­mand for out­door fur­ni­ture, small ap­pli­ances and some elec­tron­ics de­clined faster than ex­pected and sup­ply-chain snarls de­layed the ar­rival of many goods past the ideal sell­ing win­dow.

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