Target Stock Plunges After Inflation Gut Punch

MINNEAPOLIS — The price of Target stock dropped more than 26 percent Wednesday morning after the retail giant announced disappointing quarter one earnings.

The Minneapolis-based corporation reported profits from the first part of 2022 that fell below Wall Street's expectations. Inflation and supply chain snags ate into Target's revenue.

Target took in about $1 billion from the start of the year through April. That number is about half of what it made during the same period in 2021, the New York Times reported.

Target plans to absorb inflation costs rather than pass them onto its customers, even if it hurts profits, according to the Wall Street Journal.

"Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time," Brian Cornell, chairman and chief executive officer of Target Corporation, acknowledges in a statement.

"Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of 8 percent or higher over time."

Target is far from the only corporate giant hurt by inflation. Walmart stock took a nosedive after posting similarly disappointing earnings numbers Tuesday.