Target reported a 52% drop in profit for the first quarter, falling by far Wall Street’s expectations.
Just as other retailers before, Target blamed poor results on higher expenses caused by supply chain disruptions and lower-than-expected sales.
“We faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time,” said Target CEO Brian Cornell in a press release.
Target said overall sales for the company were up 4% from a year ago, topping estimates.
However, Target’s miss on profits dragged down Dow Jones, SP&500 and other top companies’ shares. Shares of Target plunged 22% in early trading on Wednesday.
Target’s massive drop on profits came one day after rival Walmart reported that it also missed on earnings, sending shares falling more than 11% and sitting at a 52-week low.
Consumers holding back on nonessential purchasing while facing skyrocketing inflation are still hitting sales for every retailer.
Target also noted that there were “lower-than-expected sales in discretionary categories,” which was having an impact on inventory value.