Target Drops on Rising Cost Pressures in Supply Chain, Labor
- Retail chain’s gross margin slipped as expenses climbed
- Third-quarter sales gain outpaced Wall Street’s expectations
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Target Corp. tumbled after warning that cost pressures are creeping up, stoking concerns that inflation will dent profits at big retailers.
The company isn’t foisting all its cost increases onto customers, said Chief Financial Officer Michael Fiddelke, echoing recent comments by Walmart Inc. Gross margin, a measure of pricing power, fell in the third quarter on higher merchandise and freight costs, Target said in an earnings statement Wednesday. Another drag came from labor expenses at distribution centers.