Target reported weaker Q2 sales, acknowledging it was partly due to backlash over its annual pride month collection in May, first from shoppers who reacted negatively to items like children’s clothing in front-of-store displays, then from LGBTQ groups angered by the company’s response. However, Target’s earnings beat expectations, efficiency efforts including automation and lean inventory.
UPS reported a 10.9% dip in second quarter revenue, but still hit its goal of $2.9 billion in operating profit thanks to $889 million in cost reduction compared with 2022. The company also said 1 million parcels a day were diverted to competitors due to concerns about labor negotiations. UPS also lowered full-year guidance mostly due to costs associated with the new contract, the company said.
Amazon posted a blowout Q2, with net sales up 11%, profit doubled from 2022, analysts cheering and an upgraded fulfillment plan refocused on same-day delivery. But Amazon still needs to find ways to improve a grocery business that is getting failing marks from industry observers. AWS growth continues to slow, and management said GenAI won’t contribute meaningfully in the near term.
FedEx reported a 10% drop in Q4 revenue as demand remains challenged and cost-cutting initiatives continue in an effort to boost the balance sheet, including idling more planes, while announcing it is folding Ground operations into Express in Canada, the first step in a much broader consolidation outlined in April. It’s a radical departure from the operating model of retired founder Fred Smith.
Children’s apparel retailer Carter’s plans to open 50 new stores this year, and at least 1,000 by 2027, seeing an opportunity as its SKU rationalization, price realization between selling periods and inventory management have improved the unit economics for retail, while the online-store mix shifts a bit toward brick and mortar. Executives said consumer confidence is down but not as bad as in 2022.
UPS continues to see volume declines impacting results, as it steps up automation and finds other ways to drive greater efficiency in order to offset the decline, which helped boost revenue per piece in the first quarter even with the volume falloff. The company also remains confident of a Teamsters settlement, while working overtime to retain business and keeping a contingency plan at hand.
Offsetting a weak fourth quarter report, department store firm Kohl’s is significantly expanding its store-within-a-store partnership with leading beauty brand Sephora, adding 250 such locations and bringing the total to 850 in 48 states as it pursues a target of $2 billion in sales by the end of 2025.
FedEx on Thursday released its third-quarter earnings report, upping its full-year earnings forecast as cost-cutting measures like major layoffs and air freight cutbacks take hold, even as shipping volumes globally remain challenged, boosting its stock more than 9% in after-hours trading.
Target joined fellow retail bellwethers Walmart, Home Depot and Amazon in warning about softness in consumer demand for 2023 as it reported better-than-expected earnings and revenue for Q4, although the figures cleared a lower bar.
Walmart reported ecommerce growth of 17% in Q4 to $80 billion, representing 13% of total sales, and beat expectations overall, but warned of a challenging climate for the rest of the year based on consumer sentiment and macro signals, sending uneasiness through the industry and the markets.