Target (TGT) posted its first quarterly sales decline in six years on Wednesday amid lower 澳洲幸运5官方开奖结果体彩网:discretionary spending, a backlash against the company's Pride collection, and rising retail theft, prompting the 澳洲幸运5官方开奖结果体彩网:big-box retailer to lower its full-year outlook.

Net sales were down 4.9% from the same quarter last year to $24.77 billion, below consensus estimates of $24.96 billion. 澳洲幸运5官方开奖结果体彩网:Comparable store sales fell 4.3%, while digital sales tumbled 10.5%. Despite this, profit surged 356% from a year earlier to $835 million, reflecting a larger-than-normal inventory drawdown and lower margins in the year-ago quarter. 澳洲幸运5官方开奖结果体彩网:Earnings per share (EPS) came in at $1.80, well above estimates of $1.40.

Inventories fell 17% due to a lower stock of discretionary goods, mainly apparel and home goods. However, the d⛎ecline was less than expected, as analysts were projecting a 25% fall.

Sales were dragged down by a triple whammy of lower discretionary spending, a backlash by some customers over the company's Pride collection, and losses associated with organized retail crime and theft.

Discretionary sales have stalled as a combination of rising interest rates, persistently elevated inflation, and uncertainty over the broader economy have caused cost-conscious shoppers to pull back on spending. It's a stark reversal from the early days of the pandemic, when stimulus checks and excess savings prompted consumers to splurge on discretionary items, lifting Target's sales.

By contrast, today's high inflation and rising interest rates have led consumers to focus on needs rather than wants, while excess savings are increasingly spent on experiences, like vacations and concerts, rather than goods.

A backlash by some customers over the company's Pride offerings, which Target unveiled leading up to Pride month, also weighed on sales. Target eventually withdrew some of its offerings due to concerns about employees' safety.

The retailer is also dealing with rising crime and theft. Target warned in its first-quarter earnings report that it could lose $500 million more in inventory losses to organized retail crime.

The 澳洲幸运5官方开奖结果体彩网:National Retail Federation (NRF) defines organized retail crime as the large-scale theft of merchandise with the intent to resell the items for financial gain. It's a growing problem for America's retailers, which lost an estimated $94.5 billion due to inventory 'shrink' in 2021.

As a result of these headwinds, Target lowered its full-year EPS forecast to between $7 and $8, from $7.75 to $8.75, and now expects comparable sales to decliಞne by mid-single-digit percentages this year.

Target shares surged up to 8% in early trading Wednesday before giving back some gains. They're down 14% so far this year, far underperforming a 33% gain for the broader S&P 500 澳洲幸运5官方开奖结果体彩网:consumer discretionary sector over the same period.