ROST - Target's terrible earnings drive down discount store stocks
Target’s (NYSE:TGT -25.3%) stunning earnings report is provoking steep slides across discount retailers. Target (TGT) reported a big miss on the bottom line, blaming increased costs related to freight, supply chain disruptions, and increased compensation and headcount in distribution centers. "Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time," Target CEO Brian Cornell admitted. The margin erosion and commentary on macroeconomic pressure only added to anxiety provoked by Walmart’s (WMT -7.4%) negative quarterly report a day prior. Given each company’s typically strong execution, discount retail peers reeled in anticipation of only greater pressure on margins across the space. Costco Wholesale Corporation (NASDAQ:COST -12.0%), Dollar General (NYSE:DG -12.0%), Dollar Tree (NASDAQ:DLTR -17.2%), BJs Wholesale Club Holdings (BJ -16.7%), Five Below (FIVE -11.0%), and Big Lots (BIG
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Target’s terrible earnings drive down discount store stocks