M - Mall stocks are reeling after Target drops a profitability bomb on the retail sector

The mall store sector fell in early trading on Wednesday after Target (NYSE:TGT) rattled the sector by lowering guidance on "unexpectedly" high costs that were not passed on fully to consumers. Target (TGT) was less profitable than anticipated and guided for weak operating margin. The retailer was hit by inventory issues (too early and too late), wage pressure at distribution centers, and an unfavorable merchandise mix. Meanwhile, TJX Companies (TJX) also warned of higher freight and labor costs with its earnings report. Target (TGT) fell as much as 24% in the premarket session. With many earnings reports and guidance updates still due out in the retail sector, traders are jittery again on the near-term outlook. Macy's (M) -5.82%, Nordstrom (JWN) -5.56%, Kohl's (KSS) -5.10%, Dillard's (DDS) -3.05%, Gap (GPS) -3.59%, American Eagle Outfitters (AEO) -3.48%, Victoria's Secret & Co. (VSCO) -3.77%, Bath & Body Works (BBWI) -4.25%, and Urban Outfitters (URBN) -1.99%

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Mall stocks are reeling after Target drops a profitability bomb on the retail sector