WSJ levels Target over poor earnings report: ‘Slide from cheap chic to

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Target’s stock fell and shoppers seem disillusioned with the retailer following a poor earnings report.

The Minneapolis-based retailer has seen its worst earnings report in years as the holiday shopping season is in full swing. Its stock fell 21% after the release of its third-quarter earnings report last week and, according to the Wall Street Journal, “Shoppers are falling out of love with Target.”

Inflation-weary customers have reportedly been flocking to competitor Walmart as grocery prices have been driving consumer shopping preferences. Many of Target’s more affluent shoppers seem to be fleeing to Walmart where “roughly 75% of its share gains came from households that are making more than $100,000 a year,” according to Yahoo! Finance.

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“Customers have long bragged about their cheap-chic Target purchases. Now, many are griping about items missing on shelves, long checkout lines, and products locked up to prevent theft,” WSJ reported Tuesday.

“Others say they are shopping at the chain less because they feel that groceries are cheaper elsewhere or that there is a lack of exciting items. Some say they are still upset about a Pride month collection in 2023 that they felt went too far,” the outlet added.

Target stock took a major hit last year with its Pride merchandising and notably a collection by controversial designer and satanist, Abprallen’s Erik Carnell.

The company is in a “sales funk” according to the report which noted that Chief Executive Brian Cornell and his team still insist “headwinds” like economic conditions are the reason behind the company’s poor performance.

“There’s some macro short-term headwinds that we’ve got to embrace and understand,” Cornell told investors last week.

“Target said that the number of people visiting its stores increased in the latest quarter and that shopper-experience scores are up over last year. Internal customer surveys show that feelings about customer service, checkout wait times, product availability, and store cleanliness have improved as well,” WSJ reported.

A retired executive in Miami Beach, Florida likened the current shopping experience at Target to”an old friend you kind of wander away from—an old friend who has become boring.” Lee Middleton, 68, told the Wall Street Journal that, although he used to frequently shop there, it has lost its thrill with out-of-stock products and long checkout lines adding to the challenge.

Edward Jones analyst Brian Yarbrough told the Star Tribune that Target “is losing market share.”

About 20% of Target’s sales are from groceries whereas rival Walmart boasts about 60% of its revenue is from food items. Target moved to slash prices on many items as the quarterly report surfaced.

New York University marketing professor Scott Galloway predicted that Target is looking like a “juicy” leveraged buyout and believes the “mediocre” performance by CEO Cornell over the last 10 years may put him at risk of being chopped.

Bloomberg reported Tuesday that Target has “lost its mojo,” suggesting that its “turnaround depends on creating other ‘cheap-chic’ hits to compete with the likes of Lululemon and Gap.”

“While Target was once known as a place where shoppers went for a few essentials and then left with a bunch of items they didn’t know they needed, years of disappointing sales and a deep stock rout point to a retailer that has lost its mojo,” the Tuesday reported noted.

The retailer is “betting” on in-demand $25 leggings and “a slate of other high quality, low-cost products to lure budget-conscious consumers into stores for the key holiday shopping season and reclaim its ‘cheap chic’ image and Tar-JAY moniker.”

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Originally from New York, Powers graduated from New York University and eventually made her way to sunny South Florida. Powers also contributes to BizPac Review.