CNBC reports that Target "warned investors Tuesday that its profits will take a short-term hit, as it marks down unwanted items, cancels orders and takes aggressive steps to get rid of extra inventory."
CEO Brian Cornell tells CNBC, "“We thought it was prudent for us to be decisive, act quickly, get out in front of this, address and optimize our inventory in the second quarter — take those actions necessary to remove the excess inventory and set ourselves up to continue to be guest relevant with our assortment."
"By taking swift action," the story says, "Cornell said Target can fend off further pain and make room for merchandise that customers do want, such as groceries, beauty items, household essentials and seasonal categories like back-to-school supplies."
- KC's View:
So we can expect that this summer Target will start having the kinds of blowout sales that we're used to seeing on Black Friday … which will be interesting because it could prompt other retailers to do the same thing. It also will be interesting because this all will be happening as Amazon has its annual Prime Days promotion.
This could create a lot of consumer spending … and I'm not smart enough to know whether this will be good for the economy or bad because it will create the illusion of strength where it may not exist.