Margins remain front and center for investors this earnings season, with big retailers spending heavily to expedite shipments and hiring thousands more people to navigate bottlenecks and ensure well-stocked shelves.
Minneapolis-based Target said raising prices would be the last lever it pulls to combat higher costs, but expects profits to improve later this year, as sales are boosted from new online options and same-day delivery.
NO SLOWDOWN
Sales at Target and Walmart (WMT.N) surged during the pandemic, and the retailers are building on those gains using their scale and negotiating power with suppliers to undercut smaller rivals through competitive pricing and gain market share.
“The retailers who have been able to mitigate the supply chain issues and all the headwinds have gained an advantage over mom & pop stores,” said Jessica Ramirez, retail analyst at Jane Hali & Associates.
Target expects low- to mid-single-digit revenue growth in fiscal 2022, compared with estimates of a 2.18% rise. It forecast adjusted profit to rise by high single-digits, above estimates of a marginal increase.
