Shares of Target Corporation (NYSE:TGT) are down over 8% premarket after the retailer slashed its Q2 guidance for the second time in three weeks.
The retailer now expects a Q2 operating margin of around 2%, down from 5.3% – the midpoint of a wide range guidance offered during the recent earnings results. The Bloomberg consensus sits at 6.55%.
For the second half of the year, Target expects an operating margin in the range of around 6%. The full-year revenue growth in the low-to-mid single-digit range is reaffirmed.
The company is taking actions to tackle inventory surges such as more markdowns, removing excess inventory, and canceling orders.
“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 executive officer of Target.