Target executives cited the recent U.S. ports strike and need to bring goods ahead of it as a factor in its big earnings miss on Thursday, due to elevated freight costs and overly stocked stores.
On a call with reporters, Target CEO Brian Cornell said"lingering softness in discretionary categories" and costs associated with rushing shipments and preparing for the short-lived port strike in October hurt the company's quarterly performance.Michael Fiddelke, Target executive vice president & chief operating officer, told CNBC on Wednesday that higher supply chain costs were a headwind in the quarter.
The data does show the company did bring in more containers via West Coast ports. The top three ports used by Target overall were Savannah, Georgia; Long Beach, California; and the Port of Virginia. Fiddelke described its import strategy as resulting in a situation where the retailer was"fuller a little bit earlier in the quarter than we would like to be, and we're never quite as efficient when our buildings are full, but we felt like that was the right decision to really protect the guest experience."
Signs that Target executives got the demand picture wrong can be seen in the fact that just three months ago the retailerIf Target didn't bring in more shipping containers than it did last year, the trade data shows it still brought in way too much in dollar value. According to customs data aggregated by Panjiva,imported 25,000 shipments from May 31-August 31, valued at $1.3 billion. During the same timeframe, Target imported 40,000 shipments, valued, including diapers, bread and milk.