Target Cuts Outlook After Weaker-Than-Expected Quarter

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00:00I just want your opinion on Target first. Is this a Target problem or a retail problem?

00:06Well, it's both. Virtually every retailer with Lowe's accepted this morning has really expected

00:12struggles in the year to come. We saw that with the Walmart announcement. Lots of questions around

00:18what is the impact, of course, of tariffs and the uncertainty in the economy. And Target is not

00:23immune to any of those concerns. Target also has had serious execution issues. While Walmart stock

00:30has been doing pretty well, Target's at more than a five-year low. So that really suggests,

00:37and it has been for several months now, which suggests that there are serious

00:41just execution issues and store operations issues that need to be dealt with even outside of

00:49everything related to the economy and tariffs. But they're not in a vacuum, Sucharita. They do

00:53have to deal with what's happening with the economy and tariffs. How much more difficult or how much

00:58more does it delay their timeline for right-sizing, for getting those operational issues fixed,

01:03when they are potentially dealing with some serious demand loss because of what's happening in the

01:07economy? Right. It is absolutely a perfect storm in many ways for them because they certainly have

01:16their own internal issues. In addition to the numbers that they released today, there were a lot

01:21of personnel changes that they announced. Who's going to head this new committee to rejuvenate the

01:28company? Merchandising changes. So lots of shift at the leadership level that will be attempted. But

01:36at the same time, to do that in the face of not knowing what the price of products may even be

01:43in the next six to 12 months during critical time periods like Q4 is going to be an additional

01:49challenge. And they don't have as diverse of a, they don't have as much success with dot-com,

01:57although the dot-com comps were decent. They're not as heavily invested in it as Walmart.

02:04Their retail media business, which is a profit pool that could potentially offset things,

02:10is not nearly as large as Walmart's or Amazon's. So it absolutely is a challenge that they are going

02:17to struggle to overcome in the coming year.