Target CEO says too many empty shelves in stores is hurting performance

Author:
Updated:
Original:

Target CEO Brian Cornell said its stores too often have items out of stock, as he revealed a more downbeat financial outlook for the retailer despite positive 2nd Quarter results.

According to Reuters, Cornell told reporters the Minneapolis-based company needs to "urgently" adjust inventory levels so its shelves are sufficiently stocked.

The Star Tribune reports part of the problem is being caused by its efforts to fulfill online orders from its stores and warehouses.

Bloomberg News says the stocking problems – which have also plagued its main rival Wal-Mart – is marring an otherwise decent turnaround from the company following a turbulent period that included a major data breach and its exit from Canada.

"In-stocks in our stores have been at unacceptable levels this year, and our guests deserve better," Cornell said on a conference call.

Bloomberg notes that he has appointed chief financial officer John Mulligan to the role of chief operating officer, and next month he will take on the job and make improving Target's supply chain his main focus.

Earnings up, but further improvements unlikely

Its net earnings for the three-month period ending Aug. 1 of $753 million was more than three times higher than the $234 million last year, while its earnings per share rose to $1.21 from $1.01 last year.

But the retailer told reporters that might be it for the year in terms of significant improvement.

It is predicting a 1-2 percent rise in sales in stores over the next three months, and a 30 percent rise in digital sales, estimates which analysts have described as "conservative," according to Reuters.

After starting the day 4 percent up in early trading, Target shares fell into negative territory.

Target's 'signature' products sell well

One key element of Target's ongoing transformation, which has led to major changes at the company including thousands of layoffs in the Twin Cities, was its focus on "signature" categories such as style, baby, kids and wellness.

And it seems to be paying off, with its news release revealing that performance in these categories "grew three times faster than the company average," which led to a 4-5 percent growth in both its Home and Apparel departments.

Cornell said this would be an area of continued focus for Target.

"Looking ahead, we are focused on making further progress against our strategic priorities and are committed to improving operations as we move through the important back-to-school, back-to-college and holiday seasons," he said.

Next Up

vote, vote now

MN Supreme Court dismisses attempt to block election certification

Another legal defeat for Republicans challenging the election.

prison, Rush City cell block

Another Minnesota prison inmate dies after COVID-19 diagnosis

The virus has killed at least six Minnesota inmates.

leech lake band of ojibwe sign

11,760 acres of land wrongly taken from Leech Lake Band of Ojibwe will be returned

The Senate and now the House have passed a bill that effectively returns the land. It's now headed for the president's signature.

Karl-Anthony Towns

Timberwolves release first half of 2020-21 regular season schedule

The second half of the schedule will be announced at a later date.

reindeer como zoo

Watch live: Como Zoo's live reindeer cam is back for December

The live feed will run 24/7 allowing you to keep an eye on Santa's antlered helpers.

sleeping

Three simple ways to boost your immune health heading into winter

Eating right is one thing, but there are other ways to stay healthy as the days shorten.

Taylor Rogers

Why Twins fans shouldn't give up on Taylor Rogers

The Twins closer struggled in 2020 but could rebound next season.

Co. Rd. 2 crash, Wakefield Twp.

Teen driver leaves road, crashes into three trees

Fortunately, the 16-year-old was not injured.

mndot deer  tunnel 1

Minnesota is getting its first highway crossing for animals

This will provide a safe way for animals to cross the street, and hopefully limit deer-vehicle collisions.

Related