Target shares dive as retailer warns of hit to profit
STORY: Shares of Target plummeted 26% on Wednesday after the retail giant reported profit that was half of what it made in the same period a year earlier.
Target also warned of a bigger margin hit this year due to what it called “unexpectedly high" fuel and freight costs, in a clear sign there would be no immediate relief from surging inflation.
Target said costs will rise by an additional $1 billion, more than it had anticipated for the year.
Costs have remained elevated for companies amid global health crisis disruptions to shipping channels as well as geopolitical conflict in Europe.
And executives said the supply-chain problems would remain until at least 2023.
Target's bleak results come just a day after larger rival Walmart cut its annual profit view and its shares logged their worst day since 1987, even though both retailers posted better-than-expected quarterly sales.
At an 18-month low of $160 per share, Target's stock was on course to shed about a quarter of its $100-billion value, its second-biggest single-day loss in the company's history.
Like Walmart, the worst day for Target shares was also in 1987, when the stock market crashed on what's commonly known as Black Monday.
