After its biggest earnings miss in two years and stock plunge, Target laid some of the blame on the recent U.S. ports strike, citing higher freight costs it absorbed as a result of preemptive action to move more product into the U.S. ahead of October. But cargo container trade data reviewed by CNBC tells a more nuanced tale. The port strikes, which stretched from New England to Texas, wound up lasting only a few days, but many companies, including Target, had rerouted and pulled forward shipments, loading up on inventory to make sure they had the merchandise needed for the holiday season. On a call with reporters, Target CEO Brian Cornell said “lingering softness in discretionary categories” and costs associated with rushing shipments and preparing for the short-lived port strike in October hurt the company’s quarterly performance. Michael Fiddelke, Target executive vice president and chief operating officer, told CNBC on Wednesday that higher supply chain costs were a headwind in the quarter. “We took some action to move product ahead of the port strike which came with more cost,” Fiddelke said. “It’s disappointing that a deceleration in discretionary demand combined with some cost pressures have caused us to take our guidance back down after raising it last quarter.” But the trade data does not show a surge that would equate to a major pull forward of imports in relation to the strike as compared with last year. Target’s peak season imports for 2024 compared with 2023 were flat to down, according to cargo container volumes data pulled and analyzed by ImportGenius. “The nearly even volume of twenty-foot equivalent units (TEUs) between June and September 2023 compared to that same period in 2024 is striking,” said William George, director of research at ImportGenius. “We would expect to see a clear uptick due to pre-ILA strike front-loading. This is a situation where flat really means down, as we’re seeing,” he said, referencing the stock’s decline, which reached 21% on Wednesday. The data does show the company did bring in more containers via West Coast ports. The top three ports used by Target overall were Savannah, Georgia; Long Beach, California; and the Port of Virginia. According to supply chain data firm Sonar, spot freight prices did spike in July due to the combination of peak shipping season and the pull forwards happening ahead of the strike, with prices for a 40-foot container running as high as $9,000-$10,000. In June, the freight rate was between $6,000-$7,000. (Twenty-foot containers would be half the price but subject to the same trend line.) The overall level of imports by Target in 2023 and 2024 wouldn’t lead one to conclude that any short-term price hike was a major factor in the quarter. “After reviewing the two periods over the summer where Target brought in containers for the holidays, our data shows the bulk of their containers arrived between July and August,” said Lynn Hughes, an investigative analyst at ImportGenius. “In June, there was a bump in imports, but not substantial.” Fiddelke described its import strategy as resulting in a situation where the retailer was “fuller a little bit earlier in the quarter than we would like to be, and we’re never quite as efficient when our buildings are full, but we felt like that was the right decision to really protect the guest experience.” Jerry Storch, former CEO of Toys R Us and CEO of consulting firm Storch Advisors, said Target is paying the price for bigger corporate mistakes, with any freight issue to be set aside, with the retailer relying too heavily on discretionary items in its sales mix and diluting its value positioning. “Target’s deeper problem is their strategy is not resonating with the consumer in this environment,” said Storch. “Their comp sales have lagged Walmart’s every quarter for several years. This gap was 500 basis points in the most recent quarter. That’s a lot!” Storch said. “If they brought in too much freight early, that could explain a cost or inventory issue, but not a sales miss of this magnitude.” Signs that Target executives got the demand picture wrong can be seen in the fact that just three months ago the retailer hiked its earnings forecast. Its full-year earnings forecast is now well below what it guided to earlier this year. If Target didn’t bring in more shipping containers than it did last year, the trade data shows it still brought in way too much in dollar value. According to customs data aggregated by Panjiva, Walmart imported 25,000 shipments from May 31-Aug. 31, valued at $1.3 billion. During the same time frame, Target imported 40,000 shipments, valued at $2.5 billion. Target has been in discounting mode for much of the year. In May, it cut prices on about 5,000 frequently purchased items, including diapers, bread and milk. In October, it added another 2,000 items to the discount list. The retailer has said 10,000 items in all will see lower prices by the end of holiday season. Joe Feldman, senior managing director for retail consultant Telsey Advisory Group, said everything that went wrong for Target will contribute to the continued discounting. The retailer accelerated and rerouted shipments to the West Coast to avoid the East Coast and Gulf Coast port strikes, while also anticipating stronger demand for discretionary goods, which pressured costs and left the company with elevated inventory levels. “Now, the company will have to promote more in the fourth quarter to clear through inventory to end the year in a clean position,” Feldman said. Bill Simon, former CEO of Walmart, said any short-term supply chain snafu is dwarfed by the fact that Walmart is taking some of Target’s more affluent customer market share, with Walmart reporting low single-digit growth in discretionary general merchandise categories, and Target reporting a decline in those categories. Walmart shares hit a new all-time closing high on Wednesday. Simon added that the inventory numbers for Walmart suggest if the strike was a supply chain issue all retailers had to manage, Walmart’s inventory shows it did a better job. Inventory was down 0.6%, with Walmart sales growing 5%. “I would have expected it [inventory] to go up 3%-4%,” he said. “With any front-loading for the port strike, inventory would be up even higher than that.” Even if Target’s overall trade numbers for peak season this year are in line with last year, according to Simon the market share shift means Walmart didn’t overload, but based on its struggle with consumers, “Target did.” Source: CNBCKakko's late goal lifts Rangers past Canadiens 4-3
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Kelsey Mitchell opened up about her emotional journey during the challenging 2024 season with the Indiana Fever , reflecting on the profound impact of losing her father. Despite the hardships, she expressed gratitude for the support of her teammates and fans, emphasizing the strength she found through basketball and community. Mitchell previously announced her intention to explore free agency for the first time in her career. This decision came after a season marked by profound personal loss and the rising popularity of the WNBA. Mitchell expressed excitement about taking control of her future, reflecting on the emotional journey she experienced throughout the season. Mitchell’s performance alongside Rookie of the Year Caitlin Clark made them one of the league’s most dynamic backcourts. Their synergy propelled the Indiana to a remarkable turnaround, culminating in a .643 winning percentage despite a rough start to the season. Mitchell acknowledged how Clark’s presence not only elevated the team but also attracted a new wave of fans, making Indiana a sought-after ticket. However, the season was not without its challenges . Mitchell faced the heartbreaking loss of her father, which profoundly impacted her both on and off the court. She candidly shared her struggles with grief, admitting that there were moments when she cried in the locker room before games, hiding her emotions from the public eye while trying to maintain her focus. The increased media attention and fan engagement brought both excitement and pressure. Mitchell highlighted the toxic behavior some fans exhibited online, which detracted from the purity of the sport. She emphasized that the Fever stood united against any form of hate, reinforcing the importance of respect within the basketball community. Indiana Fever Star Kelsey Mitchell Opens Up About 2024 Season Just recently, Mitchell shared how the previous season went for her. This can be seen in an article she wrote for The Player’s Tribune . This was one of the hardest seasons I’ve ever been through, in basketball and in life. Because for the first time, I had to learn how to do it without my dad. My OG best friend. I love my mama like no other, but the love of hoop my Dad and I shared was just a tad bit different. I’ve always been a daddy’s girl and loved my dad to the core. He was a coach, and I went to every basketball practice he had, every game coached, every ride to drop his players off at their homes. Everything I’ve achieved in basketball came from following the blueprint he laid out for me, since I was little. I have twin brothers, Kevin and Cameron, they’re 32. And then I have a twin sister named Chelsea. My mama had two sets of twins, Kevin and Cam, Kelsey and Chelsea — two Ks and two Cs (Yes haha, she’s a soldier). In 2024, Kelsey Mitchell faced one of her toughest seasons with Indiana, grappling with the loss of her father while striving to perform on the court. Despite the challenges, she found strength in her teammates and their shared experiences. The season brought unexpected attention to the WNBA, but the pressure often overshadowed their humanity. Mitchell reflected on her journey, expressing gratitude for the support she received and acknowledging the profound impact her father had on her career. She looked forward to embracing new opportunities, cherishing the memories they created together. This article first appeared on Hardwood Heroics and was syndicated with permission.NoneSocial media a 'threat to democracy' new report finds