Target, Feels the Impact of Inflation , as Quarterly Profits Continue to Fall.
According to CNN, Target reported that profits plummeted 90% in the second quarter as inflation drives consumers to cut back on spending.
The retailer's quarterly net income dropped to $183 million.
At the same time in 2021, Target had a net income of $1.8 billion.
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Target was forced to cut prices on general merchandise due to excess inventory, but the move did little to drive up sales.
The retailer ended the quarter with 1.5% more inventory than three months earlier and 36% more than the same time last year.
After the lower-than-expected profits were reported, shares in Target fell 2% in premarket trading.
CNN reports that this marks the second consecutive quarter of plummeting earnings for Target.
The losing streak comes after seven quarters of strong profit growth.
On August 17, CEO Brian Cornell told investors that while the environment for retailers remains "challenging," he believes that earnings will start to recover in the next quarter.
On August 17, CEO Brian Cornell told investors that while the environment for retailers remains "challenging," he believes that earnings will start to recover in the next quarter.
The high-level story is: The vast majority of the financial impact of these inventory actions is now behind us, Brian Cornell, Target CEO, via CNN.
Cornell said the company was seeing , "an encouraging start to the, back-to-school" shopping season
