Target reported stronger-than-expected quarterly profits, but the results were overshadowed by concerns over tariffs and caution in spending. Sales declined in February due to harsh weather and decreasing consumer confidence. The company plans to invest $4 billion to $5 billion this year in new store expansions, improved online delivery, and reduced production cycles.
Target’s fiscal fourth-quarter results beat most estimates, with net income of $1.1 billion and revenue falling to $30.91 billion. However, shares fell nearly 3% in late afternoon trading due to a market sell-off. The company expects earnings per share for the current year to be between $8.80 and $9.80.
Tariffs on Mexico, Canada, and China are expected to have a significant impact on Target’s profits. CEO Brian Cornell warned that prices for produce like avocados may rise industrywide as early as a few days, affecting customer spending. The company is shifting its sourcing to reduce reliance on China, which will now account for 25% of its store-label products by the end of next year.
“We need to be cautious with our expectations for the year ahead,” said Chief Financial Officer Jim Lee. Sales should pick up in the coming quarters, but the company remains vigilant about tariffs and their potential impact on profits.
Source: https://apnews.com/article/target-inflation-tariffs-economy-minnesota-345efc8c9edc03994f13dd6d624c719b