Target, which is facing excess inventory in several categories, said it's planning serval actions during the second quarter to 'right-size its inventory for the balance of the year.'
Since then, Target CEO Brian Cornell said the company has "continued to monitor external conditions and have determined the necessary actions to remain nimble in the current environment."As a result of the actions announced Tuesday along with "current expectations for the economy and consumer environment," Target slashed its second-quarter operating margin rate, which is now projected to be in a range of around 2%.
Meanwhile, the company said during the first-quarter earnings call that its operating margin rate would be "centered around our first quarter rate of 5.3%." "While these decisions will result in additional costs in the second quarter, we’re confident this rapid response will pay off for our business and our shareholders over time, resulting in improved profitability in the second half of the year and beyond," Cornell said.
The company also projected that its operating margin rate for the second half of the year to be in a range of around 6%, which Target says is "a rate that would exceed the company’s average fall season performance in the years leading up to the pandemic."Target also expects its full-year revenue growth to be in the low- to mid-single-digit range, and expects to maintain or gain market share in 2022.
Target is far from the only retailer facing excess inventory. Other major players in the retail sector, including Walmart and Macy's,
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