By ANNE D’INNOCENZIO NEW YORK (AP) Target’s third-quarter profit tumbled as the retailer struggles to lure shoppers that are being pressed by stubbornly high inflation. The Minneapolis company said Wednesday that it expects its sales slump to extend through the critical holiday shopping season. The company also announced that it’s planning to invest another billion dollars next year to remodel stores, build new ones, increasing the total cost for the makeover to $5 billion. Investors have punished Target’s stock recently, sending it down 43% over the past year. Shares were essentially flat in early trading Wednesday. Turning around the 19% profit slide in the most recent quarter is the latest challenge for incoming CEO Michael Fiddelke, a 20-year company veteran who is replacing CEO Brian Cornell in February. The handover arrives as the retailer tries to reverse a persistent sales malaise and to revive its reputation as the place to go for affordable but stylish products. Comparable sales those from established physical stores and online channels dipped 2. 7% in its latest three-month period. That’s worse then the 1. 9% drop in the previous quarter and the third straight quarterly decline. Target’s troubles stand in stark contrast to rival Walmart, the nation’s largest retailer, which is thriving. Walmart reports on its most recent quarterly performance Thursday. Target announced in October that it was eliminating about 1, 800 corporate positions to streamline decision-making and accelerate company initiatives. The cuts represent about 8% of Target’s corporate workforce. To pump up sales, Target is offering more than 20, 000 new items, twice as many as last year, and it has lowered prices on thousands of groceries and other essential items. “The environment around us continues to evolve, whether it’s shifting consumer demand, changing competitor dynamics, or broader macroeconomic pressures,” Fiddelke said on an earnings call Wednesday. ”But let me be clear. We are not waiting for conditions to improve. We are driving the change ourselves right now.” With about 1, 980 U. S. stores, Target has struggled to find its footing since inflation caused Americans to curtail much of their discretionary spending. At the same time, Target customers have complained of messy stores lacking the budget-priced niche that long ago earned the retailer the nickname “Tarzhay.” Consumer boycotts since late January, when Target joined rival Walmart and a number of other prominent American brands in scaling back its corporate diversity, equity and inclusion initiatives, have compounded the predicament. Other, more recent macro headwinds, are buffeting the entire retail sector. For almost a year, retailers have struggled to navigate President Donald Trump’s wide-ranging tariffs on imports and his immigration crackdown that threatened to shrink the supply of workers available to U. S. companies. The just ended 43-day federal shutdown is expected to be another drag on an economy. Government contract awards have slowed and many food aid recipients have seen their benefits interrupted, both of which can cut into consumer spending at places like Target. Fiddelke told reporters that the company saw a weaker September but he said it was “tricky for us to isolate” the different factors behind that. The retailer’s profit fell to $689 million in the three-month period ended Nov. 1, or $1. 51 per share. Adjusted per share results added up to $1. 78. That is better than the $1. 71 that Wall Street was expecting, according to a poll by FactSet, but below the $1. 85 per share the company earned in the same period last year. Sales fell 1. 5% to $25. 27 billion, just shy of analyst projections. Sales gains in food and beverages were offset by continued weakness in discretionary goods, with anxious shoppers focused increasingly on buying essentials, even during the holidays. For example, customers this year customers bought candy and costumes for Halloween, but spent less on decorations, said Rick Gomez, chief commercial officer for Target. Gomez thinks they will make similar tradeoffs during the winter holiday season. “We think the consumer will prioritize what goes under the tree versus what goes on the tree,” he said. Target also announced a partnership with OpenAI on Wednesday that will let users browse Target items through the tech company’s app ChatGPT. When customers are ready to buy, they’ll be directed to the Target app. For the fourth quarter, Target expects that comparable sales will decline by low single digits. For the full year, it now expects earnings per share to be in the $7 per share to $8 per share range, down from its earlier forecast of $7 to $9.
https://www.santacruzsentinel.com/2025/11/19/target-results/
Tag: discretionary
Japan economy sees 1.8% GDP drop in Q3
Japan’s Economy Shrinks 1.8% in Q3, Highlighting Fragile Recovery
Japan’s economy contracted by 1.8% on an annualized basis in the July-September quarter, marking its first decline in six quarters. This slowdown stemmed from softer exports, weak consumer spending, and regulatory pressures, signaling ongoing fragility in Japan’s economic recovery.
Exports and Trade Impact
Exports weighed heavily on growth as trade tensions—particularly tariffs on shipments to the United States—reduced output. Net external demand subtracted from overall quarterly growth, reflecting challenges in Japan’s trade environment.
Consumer Spending Slows
Private consumption, which accounts for more than half of Japan’s GDP, grew by only 0.1%. High living expenses and stagnant wages have made households cautious, limiting discretionary spending on goods and services. Rising costs for staples such as food, electricity, and gas have stretched household budgets, leaving less disposable income for items like dining out, travel, and entertainment.
Housing Investment Declines
Housing investment also suffered during the quarter due to changes in building regulations and tighter financing conditions. Residential expenditure plunged as both builders and homebuyers faced higher interest rates and increased building costs, leading to a slowdown in new home construction and real estate development.
Business Investment Shows Modest Growth
On a positive note, businesses increased capital spending by approximately 1%, driven by strong business sentiment and targeted investments in equipment and factories. However, firms remain cautious, scaling back spending on new projects amid softened domestic and international demand, as trade pressures persist.
Government Rolls Out Major Stimulus Amid Rising Inflation
Inflation remains elevated, with core consumer prices climbing significantly above the Bank of Japan’s 2% target. Soaring prices for essential goods continue to pressure households.
In response, Prime Minister Sanae Takaichi is preparing an ambitious economic stimulus package valued at over ¥17 trillion (around US$110 billion). Expected measures include subsidies for electricity and gas bills, gasoline tax cuts, targeted tax breaks, and strategic investments in growth industries such as AI and semiconductors.
The government plans to fund the stimulus through a large supplementary budget, likely exceeding last year’s additional spending of ¥13.9 trillion. Policymakers face the challenge of providing strong fiscal support while managing the long-term fiscal implications, as Japan’s already elevated public debt raises concerns about financial stability.
Bank of Japan’s Delicate Position
The Bank of Japan is navigating a delicate path. While weak output may reduce short-term pressure to raise interest rates, persistent inflation remains a concern. Policymakers are exercising caution, aiming to balance support for growth with the goal of maintaining price stability.
Prime Minister Takaichi has called for “wage-driven inflation,” where price increases correspond not only to higher costs but also to rising incomes.
Consumer Confidence and Outlook
Consumer confidence remains fragile. According to a September 2025 Bank of Japan survey, 62.5% of respondents felt economic conditions were worse than a year ago, while only 3.8% reported improvements. Many households express concerns about job security and the impact of inflation on their financial stability.
Conclusion
Weak household spending combined with restrained business investment has exacerbated the negative impact of declining exports, resulting in an overall GDP decline in Q3. As Japan’s economy navigates these challenges, upcoming government stimulus measures and monetary policy decisions will be critical to steering the recovery forward.
https://bitcoinethereumnews.com/finance/japan-economy-sees-1-8-gdp-drop-in-q3/