Target’s profit sinks after it cut prices to clear inventory

Target logo.
Target logo.(MGN)
Published: Aug. 17, 2022 at 6:26 AM CDT
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NEW YORK (AP) - Target has reported solid sales for the fiscal second quarter but its profits plunged nearly 90% because it slashed prices to clear unwanted inventories of clothing, home goods and other discretionary items.

The weaker-than-expected profit came two months after Target warned it was canceling orders from suppliers and aggressively discounting because of a pronounced spending shift by Americans that left the Minneapolis-based discounter with bloated inventory.

Like many retailers, Target has been blindsided by consumers’ lightening-speed switch from spending on pandemic-inspired home items, like TVs and small kitchen appliances, to investing on experiences.

Moreover, surging inflation is forcing shoppers to focus on basic necessities.

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