Target Corporation (TGT) Stock: Shares Plummet As The Retail Giant Struggles In Q4

Looking Forward

What could possibly be the cause of such a drop in earnings per share? Well, there are probably a number of factors, but most point to the theory that online retailers such as Amazon.com, Inc. (NASDAQ:AMZN) are eating into the earnings of Target Corporation (NYSE:TGT) and other big box retailers. More and more customers are becoming comfortable with the idea of purchasing items from online retailers. It took a while for the public to adjust to this, but once they did they took it on with gusto.

Amazon often makes things easier for those who are looking for some specific. A retail store may not have it in stock or may not carry the item at all. Many also look at the prices that are available online and decide that it is really the best option for them. They may have to wait a few extra days to get the item, but at least they get to save some money doing it.

It is not all about what the online retailers are doing to the bottom line of brick and mortar stores. There are other factors as well such as the fact that Target sold off its in-store pharmacies (2) to CVS in 2015. This lowered the company’s overall sales. Still, even with this factored in the company still would have missed its earnings goals.

To the credit of Target Corporation (NYSE:TGT), they have managed to grow their online platform and sales are increasing rapidly for the company online, but it is just not enough to make up for what they are losing on the physical stores. It is something that is troubling the retailer, but something that they are attempting to adapt to. After all, if that is the way that the world is moving, then Target wants to be a part of that movement.

Investors are definitely concerned about the developments that they saw today. They treated the stock accordingly. In early trading on this day the stock was down 13%. That brings the total loss to 20% for the year for Target stock.