Target’s in some trouble – and its woes may be helping other discount retailers like Walmart and even T.J. Maxx.
On Wednesday, Target reported weaker-than-expected first quarter earnings, which was lead by a pullback in spending from shoppers that are being more discerning with their money, according to Brian Cornell, Target’s chief executive.
Consumers are continuing to respond to “newness and value” that the company is offering, Cornell said. That, however, hasn’t gone over well with consumers nor shareholders. Target’s stock sank 7% during afternoon trading.
During the first quarter, Target reported a 3.7% sales decline as customers backed off from purchasing groceries and discretionary goods, such as home decor and apparel.
Meanwhile, Walmart seems to be attracting those consumers on the hunt for deals – including those making more money. Last week, the retailer reported quarterly earnings that revealed even high-income shoppers are turning to the big-box retailer for value that doesn’t empty their wallets.
Sales at Walmart during that period were up 3.8%. The sales boost sent Walmart’s stock to an all-time high.
Meanwhile, with pesky inflation ever-present, customers are still making the trip to their off-price retailer T.J. Maxx, the flagship chain of TJX Companies, which also owns Marmaxx and HomeGoods.
Sales across TJX were up 3% during its first quarter, largely due to an increase in customer transactions, according to Erin Herman, TJX’s chief executive.
That pushed TJX’s stock up to a record high, rallying over 6% during afternoon trading and surpassing its record close of $101 on March 28.
“We see this as an excellent indicator of the strength of our business,” Herman said during the company’s earnings call.
She added that during the period, the company “flexed” its store assortments and leaned into categories that consumers were looking for. In the near term, Herman said TJX plans to roll out new items across its stores and online for the spring and summer season. Over the long term, TJX has plans to expand its global footprint, she added.
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