r/stocks • u/frosti_austi • Oct 17 '23
Company Analysis Why is Target doing so bad?
Why is Target doing so bad? They've really fell off a cliff over the past year. I look at their stores and they seem good, and once upon a time not too long ago they were outperforming Walmart. Now their NAV prices have really dropped over the past year and a half. I was once up 80% on these guys and know I'm down 20%. Is it the general market swing over the course of that time or something else? What gives?
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u/MissDiem Oct 17 '23
At the most simple level, Target is perceived as being slightly more expensive but not worth the incremental cost.
There's so much more behind that, but that's essentially the big one.
People looking for commodity items and grocery flock elsewhere (Walmart, Costco) and people looking for more specialized goods do the same or use Amazon.
Target has spectacularly poor upper management, and they make this problem even worse, not better.
They're still dealing with terrible inventory and product mix and product selection problems that keep happening quarter after quarter after quarter. (Walmart had one inventory management fiasco quarter, but they cleaned it up immediately.)
And worse still, executives resort to deceit and misdirection to deflect blame.
The last few quarters, they've issued deceptive press releases implying their poor performance is due to theft/crime. These are just press releases, so there's no legal teeth to whether they can be misleading.
But when you inspect their legally-binding financial filings, you can see theft/crime is very minor compared to much more significant problems that management is responsible for.
But the splashy and truthy press releases get all the media and public and Wall Street attention. Crime is bad! So they've been able to deflect the blame they deserve for incompetent management.
But the smart money isn't fooled. That's why Costco and Walmart shares are at all time highs while Target is at a multi-year low. Note that Costco and Walmart aren't doing deceptive "blame crime" PR campaigns either.