Wall Street Journal Assignment 2

Wall Street Journal Assignment “Target Stock Surges as Earnings Overshadow Sales Decline” Submitted by: Balnur Ali Introduction: As Target, one of the biggest retail chains in the United States, struggles with a decrease in sales only before the critical Christmas shopping season, this article takes an interesting look at what has been happening recently. Target has been able to increase its profits by effectively managing inventory and controlling costs, despite a 4.9% decrease in comparable sales for the quarter. This report examines the specific products and categories which have been affected, Target's strategies for fighting off economic pressures as well as its performance over the past few years on the stock market. Furthermore, I will connect these insights with an examination of Target's stock performance and conclude with predictions for the company's upcoming holiday season, as well as answering to the following questions: 1. What kinds of products do people buy at Target? Target sells a wide variety of products, such as clothes, home goods, electronics, beauty items and groceries. The article says some categories, such as beauty products and home goods, have been experiencing good trends in spite of the overall sales challenges. 2. Who do you think is Target's typical shopper? The supplied text does not explicitly define the typical consumer of Target. However, it highlights the challenges faced by consumers in terms of rising food prices, inflation, lower savings and increased credit card debt. It follows from this that Target's customer base may include several types of consumers, who are concerned with different macroeconomic pressures. 3. How is Target managing to succeed when so many shoppers are trying to save money (or not purchase items at all)? What seems to be their strategy? Strategies such as tight inventory management, control of costs and efficiency in operations are helping the target to succeed. In anticipation of the decrease in sales, and anticipating an increase in earnings compared to last year, the company is focusing on making its products more accessible over the holiday period. In addition, the success of these companies can be based on Target's efforts in adapting to changing consumer behavior such as delays in buying seasonal goods.

4. Are certain areas of their business or product lines performing better than others? According to the article, there are some parts of Target's business where it does well above the others. Positive sales trends were also observed in the field of beauty products and home goods. Even though overall clothing sales are decreasing, specific sections of their flagship line of women's clothes have experienced positive growth. 5. What is Target's stock performance over the past few years? At what price is Target trading at now compared to the same time last year? 2 years ago? 5 years ago? 12/1/2 018 2/1 /20 19 4/1/2019 6/1 /20 19 8/1/2019 10/1/2019 12/1/2 019 2/1 /20 20 4/1/2020 6/1 /20 20 8/1/2020 10/1/2020 12/1/2 020 2/1 /20 21 4/1/2021 6/1 /20 21 8/1/2021 10/1/2021 12/1/2021 2/1 /20 22 4/1/2022 6/1 /20 22 8/1/2022 10/1/2022 12/1/2022 2/1/2023 4/1 /20 23 6/1/2023 8/1 /20 23 10/1/2 023 0 50 100 150 200 250 300 TGT stock price (monthly), 5 y Source: finance.yahoo.com Based on the data above: Date Price 11/1/2023 $128.56 11/1/2022 $160.83 (1 year ago) 11/1/2021 $230.52 (2 years ago) 11/1/2018 $58.75 (5 years ago) Target's currently trading at $128.56, down from $160.83 a year ago, compared to its current stock price that compares with the same time last year. In comparing Target's share price in the past two years to its current level, which is $128.56, as against $230.52 a year before, we can see that it has declined by more than 60 per cent. The stock price has experienced a significant increase over the past five years. Target's current price, which is a significant increase of $58.75 in five years time, is $128.56.