Target Reports Major Earnings Miss as Consumer Spending Shifts

The retailer cites cost pressures, inventory challenges, and declining discretionary demand, while rival Walmart gains market share.

Target's Q3 earnings fell significantly short of expectations, with profits dropping to $1.85 per share, down from $2.10 a year ago.
The company attributed its struggles to higher supply chain costs, inventory buildup, and weak demand for discretionary items like apparel and home goods.
Target's sales strategy, including aggressive discounting on over 10,000 items this year, has not offset declining consumer spending on non-essential goods.
Walmart, in contrast, reported strong Q3 sales growth, boosted by its focus on groceries and value-oriented offerings, gaining market share from higher-income households.
Analysts highlight Target's over-reliance on discretionary categories and operational missteps, while Walmart's strategic inventory management and pricing have proven more effective.