Retail

Target Crushed by Walmart

Douglas A. McIntyre

Published: March 6, 2024 6:45 am

Target Corp. (NYSE: TGT), the second-largest big-box retailer in the United States, posted poor fourth-quarter and 2023 results. A week earlier, its larger rival posted numbers that cheered Wall Street. Walmart Inc. (NYSE: WMT) has a much better online presence, and its store count advantage is overwhelming.

At first, Target’s figures looked solid, and the stock rose. However, The Wall Street Journal made the most important point about the announcement: “Target Aims for Turnaround After First Sales Decline Since 2016.” Since the quarter included the holidays, it should have been much better.

Target’s plans present a challenge. They are too ambitious. They call for opening hundreds of stores, investing in new stores, and launching a new loyalty program. It must do this in a retail jungle dominated by Walmart, Costco, and Amazon. Each reported strong results over the holidays, compared to Target’s weak ones.

For the most recently reported quarter, Target had revenue of $31.9 billion, up less than 2% from a year ago. Earnings were solid at $2.98 per share, up 57%. Same-store sales fell 4.4%. the company has almost 2,000 stores.

Compare the Target figures to Walmart’s. In the fourth fiscal quarter, Walmart’s revenue was $173.4 billion, up 5.7%. Adjusted per-share earnings rose 5% to $1.80. Target had a net income of $1.4 billion. Walmart’s was $5.5 billion. Walmart has 4,600 stores. (Check out 10 Stores Like Walmart: Best Alternatives and Affordable Options.)

Another contrast to Target is Amazon.com Inc. (NASDAQ: AMZN). Its revenue in the most recent quarter was $170 billion, on which it made $10.6 billion. The results included AWS, the company’s cloud computing business.

Target is too small to compete effectively.