Target didn't have to be "Great" today. They didn't even have to be good.
Since briefly becoming America's retail comfort food during COVID Target has been on an epic run of failure. The misses have only been interrupted only by short periods of optimism which quickly proved to be misplaced. The trend has been irreversibly lower and the stock shows it. Shares are off 65% from the all-time highs of late 2021 and 25% YTD.
With all that widely known, all Target had to do "beat expectations" this morning was show any type of pulse.
Instead, Target turned in the worst earnings report of the quarter among the majors. This had something for everyone. Target missed on every metric. Comp-store sales fell 5.7% which is just... holy crap levels of terrible, compared to Walmart or TJX (which also disappointed with comps only up 3%).
The only gains were in Legal Settlements and same-day delivery, which are One Time and Unprofitable, respectively.
Make no mistake, this is a disaster:
Target is going in the wrong direction at an increasing rate. The company looks old, sloppy and out of ideas. Shares might bounce but there's no reason to think anything short of a total reboot can save Target now.
Grade: F
Target shares are down about 5% in the pre-market. Unless the call produces a miracle there's nothing here to prop the stock higher. Revenues are retreating to pre-COVID levels and profits are almost there already.
