Target 2024 Earnings: Warning Signs But Is There Hope Ahead?
Target's earnings were better than I expected overall, but the growth was still behind their peers. In contrast to huge operating income growth at Walmart and Amazon, Target's operating income declined year over year.
Where Is Target's CMO?
Also, asking for a friend -- where the hell is the Target CMO? Waiting for a hire there.
Key Performance Metrics: Target vs. Competitors
A few Q4 highlights illustrate the challenge Target is up against:
Comparable sales growth of 1.5% (across digital/physical)
eCommerce growth of 8.7%
Operating income declined 24%
Compare these stats to Walmart in Q4:
Comp sales growth of 4.6%
eCommerce growth of 20%
Operating income growth of 8.3%
Essentially, Target is losing more money year over year, and is growing slower than its larger peers. Not a recipe for breakout success.
If this is the Tarzhay magic, then the magician perhaps has lost his magic hat, as well as any rabbits to pull out of it.
Growth Plans: Target Plus and Ad Business Expansion
Still, someone at the company must have heard me:
Target Plus is mentioned as a key priority which is planned to grow from $1B to $5B by 2030.
Target's ad business plans to double by 2030 to $4B from its current $2B.
Tariffs and Consumer Uncertainty
How about tariffs?
The company explains this is contributing to consumer uncertainty and this leading to meaningful profit pressure in the first quarter of the year.
This could be a warning sign to other retailers, especially those without as much buying power as Target.
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