TGT US -25%: The big US retailer announced higher costs and weakening demand in an earnings update overnight that prompted a 25% drop in the shares which flowed through to weakness in our retail sector today. Their CEO Brian Cornell said that profit will amount to only about 6% of sales this year, 2 percentage points below the previous forecast, with the company’s first-quarter adjusted profit missing the lowest of 23 analyst estimates on Bloomberg. “We were less profitable than we expected to be, or intend to be over time,” – “Looking ahead, it’s clear that many of these cost pressures will persist in the near term.” We saw a similar trend from Walmart and that’s prompted some concern within our own retailers.
MM is cautious US retail
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