Target Drops On Store Closures

Big-box retailer Target continued its precipitous decline today after becoming the latest company to close some stores due to violence and theft. ❌

The company said it will close nine of its nearly 2,000 U.S. stores after struggling to control crime and safety at those locations. The impacted cities include New York City, Seattle, San Francisco, and Portland. 

In a news release, it said, “We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests and contributing to unsustainable business performance.” Interestingly, unlike other retailers who have closed stores, Target explicitly called out retail crime as its primary reason for the decision. 🚨

During its second-quarter earnings in mid-May, CEO Brian Cornell said organized retail crime had risen in its stores and that overall shrink would impact full-year profitability by more than $500 million. He also reiterated back then that the company did not want to close stores. But evidently, the problem has become bad enough to close at least these nine stores and likely review others.

Overall, theft is just one of the company’s recent headwinds. Over the last year, it’s faced an inventory glut, backlash over its Pride merchandise, and a continued pullback in consumer spending on discretionary items. But beginning last August, it started calling out shrink as a significant factor in its margins and has continued to do so. 😬

However, some analysts and industry experts remain wary of claims that the impact of theft on retailers has been worse than in recent history. A National Retail Federation study showed that the effect of theft on retailers’ bottom lines is largely in line with what it has been in past years. Thought it could just be it’s impacting certain retailers more than others. 🤔

Whether or not it’s a “valid reason” or not, something is undoubtedly hitting Target’s stock. $TGT shares are now down nearly 60% from their all-time highs, marking their fourth largest drawdown as a public company.

As of now, it’s unclear what the catalyst will be to turn the company’s current trajectory around. With most companies offering a cautious consumer outlook, it’s unlikely to be a blockbuster holiday shopping season for the retailer and its peers. But as always, time will tell. 🤷

Musk Threatens Tesla’s AI Ambitions

The primary bull case for Tesla is that it’s not an automobile company but a technology one. Part of the reason it’s able to command such a high valuation relative to its peers is because of that technology’s potential business impact way down the line, especially as it introduces newer developments like artificial intelligence (AI).

However, that bull case is facing an unlikely opposition…from Elon Musk himself. 🤦

Read It

All About Artificial Intelligence (AI)

It was another busy day for artificial intelligence (AI) news, with three U.S. tech giants unveiling new information and C3.ai reporting earnings. 📰

Let’s quickly cover the more concise news before jumping into earnings, starting with Google launching its new AI model that it hopes will take down GPT-4. CEO Sundar Pichai said that Google is entering a new era of AI: the Gemini era. 

Read It

Pfizer’s Flop Continues

It’s been a rough ride for pharmaceutical giant Pfizer since the end of the pandemic, and that rollercoaster ride continues today. 🎢

The company last announced earnings in October but needed to update Wall Street on its 2024 forecast. It cited weak demand for its Covid products as the reason for a weaker-than-anticipated revenue and earnings forecast.

Read It

Thailand Scores Major EV Win

Thailand has been helping lead the electric vehicle (EV) push, with the second-biggest economy in Southeast Asia looking to achieve carbon neutrality by 2050. ♻️

The country is known as the “Detroit of Asia,” serving as a major manufacturing hub. As part of that, it’s looking to make 30% of its car output electric by 2030 so that it doesn’t lose its leadership position in the EV transition. Its government is putting up major funds to help fund that, approving $970 million in tax cuts and subsidies to help encourage demand and boost local production. ⚡

Read It