Target pledges to reinvest in business after weak quarter
NEW YORK (AP) — Target, stung by the migration of its customers elsewhere, pledged Tuesday to spruce up some "tired" stores and make other investments in its business after delivering weak quarterly results and an outlook far below what analysts were expecting.
The retailer's profit for the quarter that includes the holiday season fell 43 percent, with strong online sales failing to offset weaker business at its stores.
The company also plans to treat its stores as local distribution hubs — using the backrooms not just to store merchandise until it moves to the sales floor, but also to house products that will be sent directly to online shoppers' homes or be picked up at stores by them.
Cornell said Target wants to return to more consistent low prices on essentials to deepen loyalty among shoppers, a shift from the temporary discounts it had been promoting.
[...] Cornell told investors those efforts weren't enough, and Target has seen three straight quarters of declines for a key revenue measure and declining customer counts.
[...] Wal-Mart Stores Inc. posted another quarter of higher customer traffic and same-store sales as its efforts to merge its online services with its vast number of stores have clicked.
"Target is trying to cater to both ends — the lower-middle class with everyday low prices and upper middle-income with more fashion-oriented merchandise," said Ken Perkins, president of research firm Retail Metrics LLC.
Sales at stores open at least a year, a key measure of a retailer's health, fell for the third straight quarter.