Wall Street Punishes Retailers That Eat Costs, Defer Price Hikes
- Walmart, Target are emphasizing market share, customer ties
- Both companies ramped up inventories amid supply-chain squeeze
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Walmart Inc. and Target Corp. said this week that their costs are outpacing their prices, and they’re not exactly rushing to close the gap. Wall Street’s verdict: sell.
Target sank the most in eight months on Wednesday after reporting a decline in gross margin, a broad measure of profitability that was one of the few blemishes on a strong earnings report. Walmart fell a day earlier when it disclosed similar pressure, even as the company -- like Target -- exceeded expectations for profit and sales.