In the second quarter of Target's fiscal year, the sales problem of non-essential products still has not been solved, and the overall sales have dropped significantly.

In the second quarter of Target's fiscal year, the sales problem of non-essential products still has not been solved, and the overall sales have dropped significantly.

Target saw a sharp decline in its fiscal quarter ended July 29. Quarterly sales were US$24.38 billion, a year-on-year decrease of 4.9% and a quarter-on-quarter decrease of 2% from the first quarter.

Target’s performance this quarter showed three characteristics:

1. The physical store failed to take the lead. Target's online sales fell by 10.5% year-on-year, but more importantly, sales in offline physical stores fell by as much as 5.3%, showing that the company failed to seize the consumption trend of customers returning to physical stores after the epidemic to expand its performance.

2. The weak sales of household goods, clothing and grocery items not only did not ease, but were even worse than in the first quarter. Sales declines in these three key discretionary categories hit a high of 10%-15% in the quarter.

3. The inventory decreased, and the profit was better than the same period last year. A series of cost-cutting and efficiency-enhancing measures taken by Target, such as reducing inventory, have received results this quarter. The company's inventory decreased by 17% year-on-year, which improved the gross profit level. Net profit for the quarter was US$835 million, a 356.5% increase compared to the same period in 2022, but a 12% decrease from the first quarter of the fiscal year. .

4. Overall, Target still relied heavily on sales of essentials such as food during the quarter. Although the sales preparations for the back-to-school season started earlier, they did not achieve the expected results. Target lowered its fiscal year forecast as the discretionary business weakened further.