Target shocked Wall Street on May 18 with a wide earnings miss for the fiscal first quarter, as it got hit by fuel and freight costs, higher levels of discounting, and a rotation away from items like TVs, small kitchen appliances and bicycles. That's about 43% higher than in the year-ago period. Target said it had nearly $15.1 billion of inventory as of April 30, the end of the fiscal first quarter. He said the company also wanted to get ahead of key sales seasons, such as back-to-school and the holidays, when stale merchandise could clutter stores and drive away customers.
Plus, some shoppers are trimming back on spending due to inflation or putting more of their dollars toward experiences like dining out and traveling.Ĭornell said Target decided to roll out its new inventory plan after hearing retail competitors had similar woes. That means some have an abundance of sweatpants, throw pillows and pajamas just as consumers search for swimsuits and suitcases. The extreme shift in consumers' spending habits comes as retailers start to get back to healthy in-stock levels. Abercrombie & Fitch and American Eagle Outfitters both reported a steep jump in inventory levels, up 45% and 46%, respectively, from a year ago from a mix of items not selling and supply chain delays easing. Walmart said some families are making fewer discretionary purchases as the prices of gas and groceries rise. Gap, for instance, said customers want party dresses and office clothes instead of the many fleece hoodies and active clothes the company has. Retailers from Walmart to Gap face a glut of inventory as inflation-pinched shoppers skip over categories that were popular during the first two years of the pandemic. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower
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