Expansion efforts weigh on Target

The company joins other retailers, who are also announcing disappointing Q2 earnings results.

By Motley Fool Aug 21, 2013 4:22PM
Target (TGT) released its second-quarter earnings Wednesday morning, and while profits were slightly above expectations earnings overall were weighed down by the cost of expanding into Canada.

Target's earnings are the latest in a string of disappointments from one-stop-shopping retailers such as Wal-Mart (WMT) and department stores such as Macy's (M). Target, like other big-box retailers, have put at least some of the blame for this disappointing period on frugal consumers who just aren't spending.

But Motley Fool analyst Matt Argersinger sits down with host Alison Southwick to discuss why he doesn't think this is the case.
Several major retailers with more specialized focuses, such as Best Buy (BBY) and Home Depot (HD), reported strong earnings this quarter, which leads Matt to think that frugality isn't to blame.

Target store in San Bruno, California /Justin Sullivan/Getty Images He believes consumers are shifting the way they shop these days, -- towards online shopping, and towards retailers that give consumers a clear picture of what they will get: Best Buy for electronics, Home Depot for home improvement needs, etc. While some might see this lull as a value thesis for Target or other stocks in this sector, Matt isn't interested. He sees this sector as continuing to be beleaguered for some time, and is staying away from Target for now.

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1Comment
Aug 21, 2013 4:46PM
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Target is nothing more than Walmart lite....
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