A retail analyst says Target is ‘falling behind’ Walmart, Amazon, and Costco after earnings, but hope is not lost

May 22, 2024

A retail analyst says Target is ‘falling behind’ Walmart, Amazon, and Costco after earnings, but hope is not lost

The company’s stock growth has lagged this year when compared to some of its competitors in the retail space.

BY Sam Becker

Target reported Q1 2024 earnings on Wednesday, revealing to investors that comparable sales fell 3.7% during the quarter, causing the company’s share price to fall before the market opened.

Even so, the company’s leadership notes that its quarterly performance was more or less what it anticipated.

“Our first quarter financial performance was in line with our expectations on both the top and bottom line, tracking the trajectory we outlined for this year and setting up a return to growth in the second quarter,” said Brian Cornell, chair and chief executive of Target Corporation, in a company release. “Looking ahead, our team will deliver for our guests through lower prices, a seasonally relevant assortment, ease and convenience, as we keep investing in our strategy and efficiency initiatives to get back to growth and deliver on our longer-term financial goals.”

How well has TGT stock performed in 2024?

Target shares closed on Tuesday at around $155.75. The stock was trading above $163 a share last week, marking a drop of nearly 5%. So far, year-to-date, Target’s share price topped out at nearly $178, and bottomed out at around $137. Overall for 2024, shares are up roughly 8%.

While that’s not necessarily bad, the growth in share price this year trails the company’s key competitors in a big way. Walmart’s stock, for example, is up almost 23% year-to-date, as is Costco’s stock. Amazon shares are similarly up 22% since the start of 2024. 

Consumers are still heavily focused on price

Some analysts think that Target’s attempt to target a more affluent customer base may be turning consumers toward lower-priced competitors.

“Target is feeling the impact of consumers thinking twice before pulling out their wallet to buy discretionary items such as clothing and home goods,” says Zak Stambor, a senior retail and e-commerce analyst at eMarketer, in a statement provided to Fast Company.

In an effort to generate some more traction with consumers, who are likely feeling the effects of increased prices over the past couple of years, Target has announced that it will lower prices for 5,000 common items across the store—a list that includes pet food, diapers, paper towels, and a variety of groceries. That, along with the busier shopping periods later this year, should help Target turn the tide in the coming quarters, Stambor says.

“While Target is falling behind competitors such as Amazon, Walmart, and Costco, it does see brighter days ahead as it expects to benefit from back-to-school spending and from a slight return in discretionary spend,” he says.

A retail analyst says Target is ‘falling behind’ Walmart, Amazon, and Costco after earnings, but hope is not lost

 

ABOUT THE AUTHOR

Sam Becker is a freelance writer and journalist based near New York City. He is a native of the Pacific Northwest, and a graduate of Washington State University, and his work has appeared in and on Fortune, CNBC, TIME, and more. 


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