Target’s comparable sales rose for the first time in a year as grocery aisle deals for cash-strapped customers began to pay off.
Sales at stores and digital channels operating over at least the past 12 months rose 2% in the second quarter reversing months of declines, including a 3.7% drop in the previous quarter, and a 4.4% decline during the company’s final quarter of last year.
The number of transactions at the Minneapolis retailer increased 3% compared with the same period last year, with all six main merchandising categories, including fashion and home goods, showing strength. Online sales rose 8.7% and comparable sales in clothing increased 3% compared with a year ago as customers embraced new store brands like All in Motion and Wild Fable.
Target’s profits and sales beat Wall Street expectations. The company increased its annual profit outlook but said that sales for the year could fall at the low end of its guidance for unchanged to a 2% increase.
Shares spiked 11% before the opening bell.
“We are seeing an incredibly resilient consumer in the face of high inflation,” Target’s CEO Brian Cornell said. “They are looking for newness, but they are also shopping looking for value.”
More than 50% of Target’s annual sales come from discretionary items like toys, fashion, and electronic gadgets, which had become problematic with Americans laser-focused on necessities like groceries after a run-up in inflation after the pandemic. But Target also had some missteps with its shoppers. Its comparable sales fell 5.4% in its fiscal second quarter a year ago, its first drop in six years when it was hit by the backlash from some of its customers to its Pride merchandise.
To reverse weak sales, Target in May said it would cut prices on thousands of consumer basics over several months, from diapers to milk.
It’s also trying to make shopping at its stores more convenient and enjoyable as it tries to compete with Amazon and Walmart.
Target announced a new paid membership program in April called Target Circle 360, which comes with unlimited free same-day delivery for orders over $35 and free two-day shipping for all orders. The annual $99 per year membership is getting a strong reception, with the company adding more than 2 million Target Circle members in the second quarter.
Target also has been expanding its store label brands and now has a portfolio of 45 labels including more recent ones like Figment, a kitchenware collection launched last year.
The discounter said it earned $1.19 billion, or $2.57 per share, in its second quarter. That compared with $835 million, or $1.80 per share, in the year-ago period.
Sales rose nearly 3% to $25.45 billion. But even as the number of transactions rose during the latest quarter, the average amount that shoppers spent fell, underscoring that people were focusing on deals, company executives said.
Analysts were expecting profits of $2.18 per share on sales of $25.19 billion in the latest quarter, according to FactSet.
Target now expects earnings per share for the year to range from $9 to $9.70 for the year. That’s up from a previous forecast range of $8.60 to $9.60. Analysts expected $9.23 per share, according to FactSet.
While Target said it believes its full-year guidance range of unchanged to a 2% increase in its comparable sales remains appropriate, it now believes the increase will more likely be in the lower half of that range.
Nearly three-quarters of older Americans eligible for a key federal food assistance program are not taking part, a new report finds.
The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, can help low-income Americans afford today's sky-high grocery bills — but those qualifying need to apply.
70.2% of Americans 65 and older who qualify for SNAP aren't participating in the program, per a new report from the National Council on Aging (NCOA) and the Urban Institute, a Washington, D.C.-based think tank.
- That's about 9 million people who may be struggling to afford groceries but haven't tapped this major source of government aid.
SNAP participation varies greatly by state, with only 17% of eligible Californians 65 and up receiving benefits, compared with 51% in Rhode Island.
- SNAP is administered by the U.S. Department of Agriculture but operated by states at the local level.
Meanwhile, only 49% of older Americans eligible for Supplemental Security Income — that's Social Security payments — are enrolled.
- And only 46% of those eligible for Medicare Savings Programs are taking part.
"It's shocking and unacceptable to have 9 million eligible older adults not enrolled in benefits that can make the difference between them affording food or health care each month," NCOA President and CEO Ramsey Alwin said in a statement accompanying the report.
- "These individuals are struggling to afford basic necessities, and they are missing out on critical assistance."
Education and assistance are key — Americans who are eligible for these programs but not enrolled may not know about them, may not realize they can take part, or may need help getting signed up.
Thousands of hospitality union workers on the Las Vegas Strip have reached a tentative deal with the Venetian and Palazzo resorts, a first for employees at the sprawling Italian-inspired complex that opened 25 years ago and quickly became a Sin City landmark.
The Culinary Workers Union announced Tuesday on the social platform X that the deal came together around 6:30 a.m. after a year of negotiations. It covers over 4,000 hotel and casino workers, from housekeepers and cocktail servers to bartenders and porters.
In a short video shared by the union, a housekeeper at the Venetian said the pending contract is proof that “things change if we actually voice our concern and have a group of people that back us up.”
“First-time contract for Venetian,” she said, smiling. “It’s a very historical event. It’s something we can be proud of.”
The deal needs to be approved by the union’s rank and file. Bethany Khan, a union spokesperson, said it mirrors the major wins secured in recent contracts awarded to 40,000 hospitality workers at 18 Strip properties owned or operated by casino giants MGM Resorts International, Caesars Entertainment, and Wynn Resorts.
Those wins included a 32% pay increase over five years, housekeeping workload reductions, and improved job security amid advancements in technology and artificial intelligence.
The bump in pay under those contracts will amount to an average $35 hourly wage by the end of the contracts, according to the union. Workers at these properties were making about $26 hourly with benefits before winning their latest contracts in November.
Described by the Culinary Union as their “best contracts ever,” the deals ended lengthy labor disputes that had brought the threat of a historic strike to the Strip as the city prepared to debut its new Formula One racetrack.
Patrick Nichols, Venetian’s president and CEO, said in a statement that the company looks forward to its workers ratifying the contract.
“The Venetian Resort Las Vegas has a long history of respecting our Team Members and putting their needs and interests at the center of our decision-making process,” Nichols said.
The Venetian opened in 1999 and the adjoining Palazzo in 2007. Gondolas gliding through canals both outside near Las Vegas Boulevard sidewalks and indoors through a plaza with stores and restaurants have made it a Sin City landmark.
The union says it is now turning its attention to winning five-year contracts for workers at the massive Sphere venue and at Fontainebleau Las Vegas, the Strip’s newest megaresort. Negotiations just off the Strip at the nearby Virgin Hotels are also ongoing.
Rising cancer rates among younger workers are a new factor clouding employers' health cost outlook, per a major benefits survey released Tuesday.
Cancer was the most reported condition driving up healthcare costs in 2024, followed by musculoskeletal and cardiovascular conditions.
- And while there have been major improvements in cancer survival, more younger Americans are being diagnosed each year.
By the numbers: 72% of large employers surveyed about their benefits by the Business Group on Health said they see a higher prevalence of cancer among their workers and their families.
- A recent survey by the International Foundation of Employee Benefit Plans also found that 20% of employers cited catastrophic claims and 20% cited specialty drugs as key drivers of cost increases.
- Both could be attributed in part to a rising prevalence of cancer, a spokesperson told Axios.
Some of the trends can be attributed to delayed access to care cancer screening and other preventative services during the pandemic.
- "It's also perpetuated by the alarming rates that we are seeing of cancer diagnoses in younger people," Brenna Shebel, vice president at the Business Group on Health.
- The demographic swing doesn't bode well for workers juggling career, family, and caregiving responsibilities, who'll also face a higher lifetime risk of treatment-related side effects.
A new labor market survey shows Americans have rarely felt more in need of new job opportunities — an indication of a more negative outlook about the economy despite other data that suggests a more stable picture.
The New York Federal Reserve's latest poll of consumers found 28.4% of respondents were looking for a job — the highest reading since March 2014 and up from 19.4% a year ago. That includes both individuals already out of a job and ones currently employed but seeking new roles.
The readings, from the New York Fed's thrice-annual Survey of Consumer Expectations Labor Market Survey, add to evidence that the U.S. economic outlook is worsening, even as some economists dial back their odds of a recession. While the unemployment rate remains relatively low at 4.3%, it is up from its post-pandemic low of 3.5%.
After a period of booming post-pandemic growth — tempered by surging inflation — signs continue to mount that the U.S. economy is entering a significantly softer period.
"The vibes have gotten worse," said Guy Berger, director of economic research at the Burning Glass Institute, a labor research group.
He said the survey likely reflects respondents' hearing about or having someone in their social network who's experienced difficulty finding work.
"It's not like people should be panicked — this is not like 2008, or Covid — but, given an ordinary person’s balance of risks, it probably is a little higher," Berger said.
Expectations of losing one’s job also hit a record, the new survey found: The average expected likelihood of becoming unemployed rose to 4.4%, up from 3.9% a year ago and the highest level ever recorded for the survey, which goes back to 2014.
Despite those increasingly worrisome data points, economic forecasters say a full-blown recession, commonly defined as two consecutive quarters of negative growth, remains unlikely.
Berger noted that layoffs remain low and that the percentage of the population aged 25 to 54 who is employed, at 80.9%, remains at all-time highs. Overall labor force participation, or the share of the adult population that is employed or unemployed, has been stable for the past year at just under 63%. And the rate of job openings to positions remains above pre-pandemic highs at 4.9%.
"The U.S. economy is doing just fine with steady growth," Torsten Slok, chief economist at Apollo Global Management financial group, wrote in a note to clients Saturday, citing additional "steady" data in restaurant and travel bookings, as well as credit card and bank lending.
But Berger said there is no question about the economy’s ongoing slowdown.
“It’s hard to find data moving in the right direction,” Berger said. “The best you can say is that some data are in a good spot and not getting worse. But most data points are on average moving slowly in the wrong direction.”
The New York Fed said the increase in job searchers was most pronounced among respondents older than 45, those without a college degree, and those with an annual household income less than $60,000.
Rick Goins, a 64-year-old Houston-area resident with decades of communications experience, is among those who've encountered difficulty finding new work.
In fact, he has not had a full-time role since 2016, managing only to move between contractor gigs. During the pandemic, he secured a contractor role that lasted nearly two years, but that ended in February.
"I'm not old enough to retire, and not old enough for Medicare," Goins told NBC News. "I want to keep my skills up ... I've got a lot left in the tank."
He said he'd lost count of the number of times he's been "ghosted" by employers who fail to follow up in the middle of an interview process, and said he is concerned ageism is playing a role in his lack of success.
"They want someone who's 25 years old with 25 years of experience and who'll take a $25 (an hour) salary," he quipped.
Macy’s cut its full-year sales forecast Wednesday, as the department store operator said it is contending with selective shoppers and more promotions.
The retailer posted a mixed quarter, as it topped Wall Street’s earnings expectations but missed on revenue.
Macy’s said it now anticipates net sales of between $22.1 billion and $22.4 billion, which is lower than the $22.3 billion to $22.9 billion range it had previously anticipated. That also would be a year-over-year decline from the $23.09 billion it reported in fiscal 2023.
Macy’s expects comparable sales, which take out the impact of store openings and closures, to range from a decrease of about 2% to a decline of about 0.5%. It had previously expected comparable sales to range from a decline of about 1% to a gain of 1.5%. That metric includes owned and licensed sales, which encompasses merchandise that Macy’s owns and items from brands that pay for space within its stores, along with Macy’s third-party online marketplace.
The department store operator said in a news release that the new outlook range “gives the flexibility to address the ongoing uncertainty in the discretionary consumer market.”
In an interview with CNBC, CEO Tony Spring said customers aren’t spending as freely across all of Macy’s brands — even higher-end department store Bloomingdale’s.
“We see that there is definitely a softness, a carefulness, a delay in the conversion of purchasing,” he said. “And people on the things that they want, the things that are priced sharply, on the newness, they’re responding, but even the affluent consumer is not spending like they were a year ago.”
Here’s what Macy’s reported for the fiscal second quarter compared with what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: 53 cents adjusted vs. 30 cents expected
- Revenue: $4.94 billion vs. $5.12 billion expected
Shares fell about 8% in premarket trading.
The iconic department store is pushing to get back to steadier footing and sustained growth. Spring announced in February that the retailer would shutter about 150 – or nearly a third – of its namesake stores and invest in the roughly 350 locations that remain. It plans to close the locations by early 2027.
It is also opening new, smaller Macy’s stores in suburban strip malls and adding new locations of its better-performing brands, Bloomingdale’s and Bluemercury.
Yet Macy’s results in the recent quarter revealed its struggles to pull off that comeback at a time when consumers have been pickier about purchases – especially items that are wants rather than needs.
Net sales fell from $5.13 billion in the year-ago period.
The namesake Macy’s brand continued to be the company’s weakest performer. Comparable sales fell 3.6% on an owned-plus-licensed basis, including the third-party marketplace.
At Bloomingdale’s, comparable sales declined 1.4% on an owned-plus-licensed basis, including the third-party marketplace. And Bluemercury comparable sales rose 2%, marking the 14th consecutive quarter of comparable sales growth for the beauty brand.
In the three months that ended Aug. 3, Macy’s net income was $150 million, or 53 cents per share, compared with a loss of $22 million, or 8 cents per share, in the year-ago period.
Macy’s stressed it has made progress in its turnaround plan, which it unveiled in February soon after Spring stepped into the company’s top role. At the first 50 of its stores to get additional investment, comparable sales were up 1% on an owned-plus-licensed basis. It marked the second consecutive quarter of positive comparable sales at those stores since the plan started.
Yet even when excluding the weaker stores that Macy’s is shutting, sales were lackluster. Comparable sales for its go-forward namesake brand – which includes the Macy’s stores that will remain open and online sales – declined 3.3% on an owned-plus-licensed basis, including the third-party marketplace.
Along with a choppy sales environment, Macy’s leaders had also faced a bid by an activist group to take the company private. Macy’s said last month that its board had unanimously decided to end negotiations with Arkhouse Management and Brigade Capital.
Shares of Macy’s closed on Tuesday at $17.74, bringing the company’s market cap to $4.9 billion. As of Tuesday’s close, the company’s stock is down about 12% so far this year. That trails behind the approximately 17% gains of the S&P 500 during the same period.