Target Reports Sales Decline, Shares Plunge

Target released its third-quarter earnings results and admitted that inventory loss has reduced its gross profit margin by $400 million so far this year compared to 2021, according to Yahoo Finance. 

In an email to Yahoo Finance, a Target Spokesperson said the inventory loss, or the disappearance of merchandise, was largely attributed to “organized retail crime.” 

Target CFO, Michael Fiddelke explained during the earnings call that there are “a handful of things that can drive shrink in our business and theft is certainly a key driver. We know we’re not alone across retail in seeing a trend that I think has gotten increasingly worse over the last 12 to 18 months. So we’re taking the right actions in our stores to help curb that trend where we can, but that becomes an increasing headwind on our business and we know the business of others.”

Target also announced its plans to cut up to $3 billion in costs over the next three years. According to CNBC, the company cited “the need to become more efficient after two years of dramatic sales gains.” 

Target shares dropped more than 15% on Wednesday, and more than 22% in total this year, CNBC also reported. 

To check our highlights from Target’s third-quarter earnings report, read this Yahoo Finance article.