Target’s Earnings Report Is the Corporate Equivalent of Your Dog Peeing on the Carpet

I remember when we first brought home our mini Australian shepherd puppy… coming back to a floor covered in pee and poop was just part of the deal. Target shareholders must know the feeling this morning, waking up to a 20% stock drop after the terrier mascot’s earnings report turned out to be the corporate equivalent of pissing on the floor. Not exactly the kind of surprise anyone was hoping for.

A few months back, CEO Brian Cornell suggested that brighter days were ahead. Turns out, those sunny forecasts were about as reliable as your aunt's promise to quit Facebook rants about the “younger generation” being spoiled (while she sits in her 5 bedroom house she bought for $5,000 in 1960). Instead, Target missed Wall Street's profit expectations by 20% (ironic right?).

Here’s the gory math: Target reported earnings per share of $1.85 (light-years away from Wall Street’s projected $2.30). Revenue inched up a pathetic 1.1% to $25.67 billion, falling short of the $25.90 billion analysts had penciled in. And comparable sales were only 0.3%, saved only by a 10.8% jump in digital sales. Even in-store sales were down 1.9% (not great).

As if that wasn’t enough to ruin the vibe, Target trashed its full-year earnings forecast to $8.30-$8.90 per share from the $9.00-$9.70 it had dangled like a shiny ornament a few months ago. Fourth-quarter guidance? Also a trainwreck, now projected at $1.85-$2.45—well below the $2.66 analysts were hoping for. (Guess Santa’s not stopping here this year.)

While Target was busy fumbling the bag like a drunk santa, Walmart was out here stealing market share and having a historic year. With strong discretionary sales growth and gains among upper-income households, Walmart’s stock is up 64% this year (their best gain since 1999). Target? Only 9% (and that was before today’s disaster).

Of course, Target’s execs are pointing fingers at “volatility” and “cost pressures” (because it’s always the economy). COO Michael Fiddelke called it “disappointing.” No kidding, Mike. Overloading inventory ahead of October’s brief port strike didn’t help, nor did lowering prices on essentials like milk, diapers, and cold medicine. Sure, the discounts brought in some shoppers, but they couldn’t make up for soft sales in categories like home goods and apparel.

Walmart, with groceries making up 60% of its sales (compared to Target’s 23%), has the upper hand. Turns out, people prioritize eating over redecorating their guest room. Who knew? Cornell insists the holiday season is off to a “strong” start, but will price cuts be enough? Analysts aren’t convinced. Christopher Horvers from JPMorgan says uncertainty and market share losses will keep Target from achieving a 2026-level valuation anytime soon. 

But let’s be honest, Target isn’t going anywhere. Sure, it’s bleeding market share like a bad horror movie victim, but ask every woman in your life and it’s their favorite place to spend money. If the stock keeps tanking through the holidays, this might be the discount investors have been waiting for.

P.S. Do you hear that sound? If you listen closely, it’s the sound of a stock getting probed with massive short interest, and a sky-high borrow fee that would make your 8% mortgage look like a friggin’ happy meal. Meaning, once this catalyst lights a fire under this little known stock, we could potentially see some fireworks POP… and when I say pop… I mean triple-digit to the moon pop. Curious to know what the ticker is? Click here for the details.

Stock.News has positions in Meta.