Financial Performance and Market Reaction
Target reported a modest sales increase in Q3 but a significant drop in profits, with net income falling to $854 million or $1.85 per share, missing analyst expectations.
Shares of Target fell sharply, by nearly 20%, reflecting investor concerns over the retailer's financial outlook and its ability to compete with rivals like .
Operational Challenges and Strategic Responses
The company faced increased costs due to a dockworker strike and a shift in consumer spending towards essentials and lower-priced items, impacting profit margins.
In response to changing consumer behavior and to stimulate sales, Target has been lowering prices on a wide range of products and expanding its private-label brand, while also competing with discount strategies from Walmart and Amazon.