With prices like these, Target Lady is going to change her wig.
“Saturday Night Live” fans probably know Kristen Wiig's somewhat wacky Target well. (TGT) cashier, who spends a lot of time walking away from her cash register to buy things for herself.
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Wiig created the character, which one irate customer described as “a middle-aged turtle with brown lips and a helmet of hair,” during her time in the Los Angeles comedy group Groundlings and performed him as part of her audition for SNL in 2005. .
Last month, the folks at Target recruited Wiig's character for a national ad campaign marking Target Circle Week, a sale for members of the retailer's customer loyalty program.
Now, given Target Lady's penchant for shopping, she would no doubt lose her mind following the retailer's price reduction announcement on May 20.
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Target and other retailers reduce prices
Target said it was cutting prices on about 1,500 items and that thousands more price cuts would take effect over the course of the summer.
Prices began to drop starting Monday, with “thousands more price cuts” (amounting to 5,000 items) being reduced over the summer.
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“We know consumers feel pressure to make the most of their budget, and Target is here to help them save more,” said Rick Gomez, executive vice president and head of food, essentials and beauty, in a statement.
Target joins other retailers, such as Aldi and Ikea, in cutting prices to appeal to consumers worried about inflation.
Walmart (WMT) made a big price-cutting move in March, and CEO Doug McMillon promised the retailer would reduce prices on some foods to pre-inflation levels.
McDonald's (DCM) plans to offer a $5 meal in the US starting June 25 for about a month.
Retail sales rose modestly in April, according to the National Retail Federation“as consumers continually seek value.”
“Headline inflation remains persistent due to high prices for services, while goods inflation has fallen to near zero,” said Matthew Shay, the group's president and chief executive. “Consumers remain focused on value and price and are changing their spending patterns when necessary to make ends meet.”
In March, Target reported fourth-quarter earnings of $2.98 per share, up from $1.89 per share for the year and beating Wall Street's forecast of $2.42.
Revenue totaled $31.92 billion, up 1.7% and beat analyst forecasts of $31.83 billion in sales.
Comparable sales fell 4.4%, the third straight quarter of declines, and the company said it expected another year of weak sales.
Full-year sales decreased 1.7% to $105.8 billion from a year earlier, reflecting a 3.7% decline in comparable sales.
Target called for full-year 2024 comparable sales to be flat to 2% and adjusted earnings per share to range from $8.60 to $9.60.
Michael Fiddelke, CFO and COO, told analysts that the theme “we've seen this year is a moderation in inflation,” adding that disinflation – a reduction in the rate of inflation – “is the word of the quarter in retail.”
“That's a good thing for the consumer,” he said.
Analyst Sees Target 'Poised for Positive Recovery'
Brian Cornell, Target's chief executive, told analysts that “right now we are very focused, not just in the next year, but in the next 10 years, on continuing to drive even more traffic to our stores and visits to the stores' sites.” stores to ensure that we are a company that is driving top-line growth because we know that is the best way to reward our shareholders.”
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“And we're going to be absolutely focused on gaining market share as we move forward,” he said.
Like many retailers, Target celebrated Pride month last June by selling limited-edition rainbow-colored clothing and other products.
However, Target sold rainbow-colored clothing, accessories and other lines that included breast binders, swimsuits and underwear designed for transgender consumers. This effort sparked an online backlash from customers and social media users, some of whom complained that the displays were placed near displays of children's clothing.
Target is scheduled to report fiscal first-quarter earnings on May 22. Analysts forecast earnings of $2.05 per share on revenue of $24.5 billion.
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Evercore ISI analysts took aim at Target last week by adding the Minneapolis company to their Tactical Outperform list ahead of the earnings report.
Target “appears poised for a positive traffic/share recovery beginning in mid-March as they cycle through last year's Pride assortment issue,” the investment firm said. He called for a “rise to over $170,” pending solid guidance and a constructive tone in the second quarter.
However, while Evercore says it expects “a notable improvement” in the trend and a positive inflection in growth, it adds that “there is still a lot of work to do to regain the market share and customers lost last year amid a still volatile consumption context”. “.
Evercore has an in-line rating (effectively neutral) and a $178 price target on Target shares.
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