Q3 Target Earnings

Q3 Target earnings came out this week, and the stock plummeted. Not too much of a surprise to anyone who shops at Target. Guest traffic was up 2.3%, digital sales were up 10.8%, and yet third quarter sales inched up just 0.3% – suggesting to me that in-store sales were down significantly. Is there a problem brewing with the consumer? No, the consumer seems to be holding steady since Walmart U.S. sales were up 5.3% during the same quarter. Even Gap reported better-than-expected results. So what’s wrong with Target??

CNBC paraded several analysts through and interrogated them about whether the earnings miss was specific to Target or indicative of something more sinister. It gave me a bit of chuckle since most of them were men who probably haven’t set foot in a Target for quite a while. If CNBC questioned a series of moms from across the country, I suspect they would have gotten the answer: it’s not me, it’s you Target.

Brian Cornell has presided over the slow deterioration of a once-wonderful company. 10 years ago, I was living overseas, and one of my first stops when I arrived home each summer was to Target. It was always a joyful reunion. Target carried a nice variety of pretty much everything: soaps, shampoos, lotions, toothpastes, cleaning supplies, cute clothing, basic undergarments, children’s and adult books – all of reasonable price and quality. The stores were nicely merchandised with gleaming white floors, bright lights and short fixtures, allowing me to get a good look at all of the current inventory before planning my route through the store. After spending longer than I care to admit browsing in the store, I would head to a fully staffed set of checkout lanes where my typically-efficient cashier would ring me up.

What a difference a decade makes. My most recent trip to Target was so infuriating that I almost abandoned my cart and walked out the door. To start, my local store has been remodeled with trendy dim-lighting and wood everything. While I might appreciate dim-lighting in a fitting room, I do not appreciate it when selecting produce.

Throughout the store, merchandising fixtures are too tall, obstructing my view of any attractive merchandise deeper in the store. Spoiler alert – there wasn’t much attractive merchandise in the store. 

Target used to be known for cute, inexpensive fast-fashion. I didn’t see anything like that. The clothing oscillated between stripper-chic and grandma-frumpy. Not too much in-between. I carried on through the store expecting to pick up basic home supplies. I grabbed a few things, headed to the register and stopped short when I saw the lines. Lines, lines and more lines. There were long lines at both self-checkout stations, long lines at the ONE cashier-operated line where the cashier was sitting in a chair. I calculated how long it would take me to drive to another store, collect what I needed and pay and decided it would be quickest just to wait. Unfortunately, I needed all the stuff I was buying. I may have made a different choice if I were buying clothes, housewares or seasonal goods.

To Brian Cornell and Target Leadership Team: Go back to traditional store layouts, fixtures and lighting. Fire your current apparel buying and merchandising teams. They’re terrible and have been for a while. Take the new merchandising team to a Dick’s Sporting Goods to learn how merchandise should be displayed. Staff your registers again. Self-checkout for baskets only. Anyone with a cart should be using the cashiers. If you lock up merchandise, have someone (with the key!) working in that section. Straighten up sections throughout the day. If you did these things alone, Target just might be a decent place to shop again. Until then, I’m going to Walmart – for shopping and investing.