Target Corporation Announces Updated 2022 Plan Focused on Inventory Optimization
Target Corporation (NYSE: TGT) announced a set of actions to right-size its inventory for the balance of the year and additional flexibility to focus on serving guests in a rapidly changing environment. These actions are inted to further build on the Company’s record of growth and market-share gains.
The Company is planning several actions in the second quarter, including additional markdowns, removing excess inventory and canceling orders. The action plan also includes the addition of incremental holding capacity near U.S. ports to add flexibility and speed in the portions of the supply chain most affected by external volatility; pricing actions to address the impact of unusually high transportation and fuel costs; and working with suppliers to shorten distances and lead times in the supply chain. Additionally, the Company is further accelerating work that’s already in flight, including rapid revisions to sales fores, promotional plans and cost expectations by category. Specifically, the Company is planning for continued strength in frequency categories like Food & Beverage, Household Essentials and Beauty, and is planning more conservatively in discretionary categories like Home, where trs have changed rapidly since the ning of the year. The Company is also pursuing aggressive options to control costs, including ongoing work with vors to help offset inflationary pressures, driving continued operating efficiencies, and reducing costs while preserving a strong guest experience. Finally, the Company continues to build additional capacity in the Company’s upstream supply chain to support its future growth by adding five distribution centers over the next two fiscal years. All of the actions announced today are the result of the Company’s ongoing assessment of current industry performance, the operating environment and consumer trs. “Target’s business continues to generate healthy increases in traffic and sales, despite sustained volatility in the macro environment, including shifting consumer buying patterns and rapidly changing operating conditions. Since we reported our first quarter results, we have continued to monitor external conditions and have determined the necessary actions to remain nimble in the current environment. The additional steps we are announcing today will ensure that we deliver for our guests while driving further growth. 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, chairman and chief utive officer of Target Corporation.