Target excess inventory last quarter was bound to hurt its bottom line. It chose to tear off the Band-Aid, but the pain wasn’t over.
The retailer said on Wednesday that Comparative sales increased 2.6% for its quarter ended July 30, lower than the 3.2% growth analysts polled by Visible Alpha had expected to see. Consumers still seem to be cautious in spending, even though they are buying small consumables. The fastest growing category was food and beverage, where sales at comparable stores increased by at least 10%, Target said in its earnings call Wednesday morning. The runner-up is beauty, with a high single-digit percentage. Although demand for electronics and home goods has declined, Target still sees good demand for some discretionary categories such as toys, luggage, seasonal goods, and fashion clothing.
