Target Corp. Announces Set Of Actions To Right-size Inventory; Updates 2022 Guidance

Target Corp. (TGT) announced a set of actions to right-size its inventory for the balance of the year. The company said it is planning several actions in the second quarter, including additional markdowns, removing excess inventory and canceling orders. The plan includes the addition of incremental holding capacity near U.S. ports; pricing actions; and working with suppliers to shorten distances and lead times in the supply chain.

The company noted that it is pursuing aggressive options to control costs, including ongoing work with vendors to help offset inflationary pressures, driving continued operating efficiencies, and reducing costs.

"While these decisions will result in additional costs in the second quarter, we're confident this rapid response will pay off for our business and our shareholders over time, resulting in improved profitability in the second half of the year and beyond," said Brian Cornell, CEO of Target Corp.

Target now expects its second-quarter operating margin rate will be in a range around 2%. For the back half of the year, Target now expects an operating margin rate in a range around 6%.

The company continues to expect full-year revenue growth in the low- to mid-single digit range.

Shares of Target Corp. were down 9% in pre-market trade on Tuesday.

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