Target is canceling orders from suppliers, particularly for home goods and clothing, and it’s slashing prices further to clear out amassed inventory ahead of the critical fall and holiday shopping seasons.
“Retail inventories are elevated," Michael Fiddelke, Target's chief financial officer, told The Associated Press in a phone interview Monday. ”And they certainly are for us, in some of the categories that we misforecast. We determined that acting aggressively was the right way to continue to fuel the business."
Target is working with suppliers to cover costs for their vendors whose orders are being cancelled. In some cases, some of the raw materials that were meant for some goods will instead be used for other products in higher demand, Fiddelke said. Many of the orders for products being canceled have a long production lead time of nine months, he said.Target said the costs related to the moves will hurt the bottom line in the current quarter.
Last month, Target forecast its full-year operating income margin rate would be in the 6% range. Target didn't give a new full range prediction. It also said it secured additional space near U.S. ports to hold merchandise to allow for more flexibility. Target, however, continues to expect full-year revenue growth in the low- to mid-single digit range and expects to maintain or gain market share for the year.
Shares of Target Corp. fell 9% to $145.30 in premarket trading Tuesday and the stock of other retailers retreated with it. Walmart, Nordstrom and Macy's fell between 2% and 4%.
Indonesia Berita Terbaru, Indonesia Berita utama
Similar News:Anda juga dapat membaca berita serupa dengan ini yang kami kumpulkan dari sumber berita lain.
Facing huge inventory, Target cuts vendor orders, pricesSales of big TVs and appliances that Americans loaded up on during the pandemic have faded, leaving Target with a bloated inventory that it said must be marked down to sell.
Baca lebih lajut »
Facing huge inventory, Target cuts vendor orders, pricesTarget is canceling orders from its suppliers, particularly in home and clothing, while slashing prices of goods in a bold move to clear out mounds of unwanted inventory ahead of the critical fall and holiday shopping seasons.
Baca lebih lajut »
Facing huge inventory, Target cuts vendor orders, pricesSales of big TVs and appliances that Americans loaded up on during the pandemic have faded, leaving Target with a bloated inventory that it said must be marked down to sell.
Baca lebih lajut »
Facing huge inventory, Target cuts vendor orders, pricesTarget is slashing prices to clear out amassed inventory ahead of the critical fall and holiday shopping seasons.
Baca lebih lajut »
Target is cutting prices to get rid of excess inventoryConsumer habits are shifting, and Target is trying to 'right-size' its inventory.
Baca lebih lajut »
Target to slash prices as it faces inventory glutThe company's warning spooked investors, who sent shares of its stock down more than 3%.
Baca lebih lajut »