Target is facing internal problems, not external, says Stacey Widlitz
Stacey Widlitz, president of SW Retail Advisors, joins CNBC's 'Power Lunch' to discuss outlooks on Target, why the company is losing marketshare, whether its leadership can turn the company around, and more.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
4 hours ago
- CNBC
Asia markets set to open higher as investors await a slew of data releases
Aerial view of Seoul downtown city skyline with vehicle on expressway and bridge cross over Han river in Seoul city, South Korea. Mongkol Chuewong | Moment | Getty Images Asia-Pacific markets are set to mostly climb Monday, with investors watching a slew of data points, including South Korea's and Japan's industrial output figures for May and China's purchasing managers' index readings for June. Japan's benchmark Nikkei 225 was set to open higher, with the futures contract in Chicago at 40,725 while its counterpart in Osaka last traded at 40,580, against the index's Friday close of 40,150.79. Australia's S&P/ASX 200 is slated to start the day higher, with futures tied to the benchmark at 8,521, compared to its last close of 8,514.20. Futures for Hong Kong's Hang Seng index stood at 24,182, pointing to a weaker open compared to the HSI's last close of 24,284.15. U.S. equity futures rose in early Asia hours before the year stretches into the second half. All three key benchmarks on Wall Street rose sharply in last Friday's session. The broad-based S&P 500 hit a new record in more than four months after ending the session about 0.5% higher at 6,173.07 — overtaking its previous record of 6,147.43. The Nasdaq Composite also reached an all-time high, closing at a record after adding about 0.5%, while the Dow Jones Industrial Average rose nearly 1%. The three benchmarks have staged a sharp recovery this month from the lows seen in April during the height of trade policy tensions. The whipsaw of global trade negotiations can quickly sway market sentiment and pose an ongoing threat to the strength of this rally. — CNBC's Pia Singh contributed to this report.
CNBC
4 hours ago
- CNBC
European stocks have surged in the first half. How will they perform for the rest of 2025?
European shares surged in the first half of the year, massively outperforming stocks on Wall Street — but market watchers are divided on the potential for the trend to continue. As of Friday's close, the pan-European Stoxx 600 index has gained 7% so far this year. Germany's DAX index has surged 20% year-to-date, while the FTSE 100 is up 7.7%, Italy's FTSE MIB has gained 16%, and Spain's IBEX 35 has risen around 20%. That marks a major outperformance in comparison to U.S. stocks. During the same period, the S & P 500 and the Nasdaq Composite have both added around 5%, while the Dow Jones Industrial Average is up by 3%. .STOXX YTD line Have European stocks got further to run? It is relatively rare for European stocks to rally by more than 6.6% in the first half of the year. The Stoxx Europe 600 index has risen 16 times, in 38 years, in such a manner since 1987. On average, when stocks do rally like they have in 2025, they return a mere 4.1% in the second half, according to CNBC's analysis. However, there's good news for investors. When stocks rallied in the second half, after a bumper performance in the first half, they went up by 11%. On the five occasions when stocks lost value in the second half, they fell by 9%. Wall Street's view Looking at the fundamentals, though, asset managers and analysts are also bullish for the second half of 2025. In its mid-year outlook report, Goldman Sachs Asset Management said that although the bull run in Europe had been driven in part by a diversification away from U.S. assets, the shift "isn't just about U.S. concerns." "Europe looks appealing, and many investment opportunities are emerging across sectors in the region," GSAM analysts said in the report. "Our primary focus is on identifying companies whose business are most likely to generate resilient earnings and high returns on capital." Fiscal policies across the region, like historic debt reform in Germany and a commitment from NATO members – most of whom are European nations – to drastically hike defense spending , are creating investment opportunities in defense, energy and infrastructure, they argued. "We see potential opportunities in the equity markets across geographies and sectors — including Europe and small caps, among others," they said. "Globally, companies with key differentiators and pricing power may have enhanced appeal in a world of higher tariffs." Within Europe, GSAM said it was identifying companies with strong ties to defense spending. "Europe's equity market, which has high financial and industrial sector weightings, offers useful diversification for portfolios allocated to US equities," they added. 'Substantial and lasting change' Frédérique Carrier, head of investment strategy for RBC Wealth Management in the British Isles and Asia, agrees that there are opportunities to be found across Europe. In her mid-year outlook report, Carrier argued that structural changes in Europe had the potential to pave the way for "substantial and lasting change." "The MSCI EMU (Economic and Monetary Union) Index, a proxy for European equities, trades at a price-to-earnings valuation of 15.4x 12-months forward consensus earnings forecast, roughly in line with its long-term average. It also trades at a discount to U.S. equities even on a sector-adjusted basis," she said. Carrier said RBC preferred sectors in Europe that were likely to benefit from new fiscal stimulus. Those included certain industrials, like defense and materials, as well as some financial stocks. "In our view, banks should benefit from the region's improved medium-term growth outlook and a steeper yield curve, while continuing to offer attractive shareholder returns via dividends and share buybacks," she said. "We are mindful that sectors subject to tariffs as well as those exposed to a strong currency are less likely to outperform." 'Time for a little more caution' However, some market watchers are making a case for taking a more wary approach to global equities, particularly those listed in Europe. "We as a team think it's time for a little bit of more caution at this stage, because the reality of the economic outlook over the next six months or so is that of the effect of tariffs still coming through," Julius Bendikas, European head of economics and dynamic asset allocation at Mercer, told CNBC's "Europe Early Edition" on Friday. "The hard data, in our view, is likely to turn sooner rather than later. The labor markets are still gradually cooling, so the economic fundamentals are a little bit softer, the valuations look a little bit stretched, and while the market technicals have been fairly bullish at this stage, I think the fundamental picture is still a bit softer." While he acknowledged European equities' outperformance in the first half of the year, Bendikas said he did not see a case for continuing to favor regional stocks. "I wouldn't be calling an overweight or underweight of Europe versus U.S., but we do think that playing [the] Europe narrative still very much via the euro is the best expression at this stage, and therefore would still advocate for euro versus dollar weight," he told CNBC. "But on the equities side, I would say we argue for neutrality." He also recommended favoring fixed income over equities, naming U.K. government bonds – known as gilts – "the asset class of most interest." Meanwhile, Bank of America strategists also remain bearish on European equities. In a Friday note to clients, BoA's Sebastian Raedler, Thomas Pearce and Andreas Bruckner acknowledged that the economic growth story for the euro area is improving, but said they were "sceptical about clear-cut upside this year" as German fiscal stimulus would take time. "We expect global growth to slow on tariff-related pressures, which should lift European equity risk premia and lower earnings," they added. "We stay negative on EU equities." They said their projections implied a 10% downside ahead for the Stoxx 600. "German fiscal beneficiaries have started to roll over, including defence and construction, but utilities, connected to German stimulus via climate and energy transition plans, have continued to outperform, with the sector's price relative up 24% since February and starting to overshoot their key macro drivers," they added. "As a consequence, we lower utilities from overweight to marketweight."
Miami Herald
11 hours ago
- Miami Herald
Target makes confusing move to beat Walmart, Amazon in key area
Target has been fighting a war on multiple fronts. The retailer has been dealing with the same economic uncertainties all of its rivals have faced. Labor costs have increased, tariffs loom over everything, and consumer confidence has not been strong. Related: Bankrupt ice cream chain sold to popular beverage owners Target has also been dealing with customers who think it's too woke and some who think it's not woke enough. That has led to some business struggles for the department store chain. First quarter net sales came in at $23.8 billion, a drop from $24.5 billion in 2024. It also saw its year-over-year earnings per share come in at $1.30 per share, down from $2.03 in the year-ago period. CEO Brian Cornell tried to paint a positive picture of the numbers. Don't miss the move: Subscribe to TheStreet's free daily newsletter "While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by a 36% increase in same-day delivery through Target Circle 360, and our strongest designer collaboration in more than a decade, kate spade for Target," he said in the earnings release. The challenge is that Target customers are simply buying less when they visit. Comparable sales decreased 3.8% in the first quarter, reflecting a comparable store sales decline of 5.7% and comparable digital sales growth of 4.7%. Image source: Universal Images Group via Getty Images Target has reportedly been testing shipping directly from its factories to its customers. In theory, that can cut multiple steps of out its shipping process. Currently, Target ships from its distribution centers and its stores. That means that the items have to go from factory to distribution center, and sometimes to store before being sent to the customer. This model would mirror how rivals Temu and Schein ship their goods and, in theory, give Target a tool Amazon and Walmart don't offer. "Targeting apparel, household goods, and other non-food items is at the top of Target's list, mirroring both Shein and Temu's focus on the same. Given the lengthier delivery times (and turbulent customs policies concerning U.S.-bound shipments of Chinese origin), the focus on these categories is seemingly logical," RetailWire reported. What's also somewhat confusing about this potential move is that Walmart and Amazon, by nature of their size and shipping networks, might still be able to offer cheaper prices. More Retail: Walmart makes drastic change amid alarming customer trendLowe's makes one of its largest ever billion-dollar acquisitionsSubway owner makes major billion-dollar fast food acquisitionAmazon makes a harsh decision amid concerning customer trend The bigger problem is that Target is exploring this change at a time when it's no longer beneficial. The United States used to exempt shipments of goods valued at under $800 from duty, tariffs, and taxes. That exemption was removed by the Donald Trump administration in June. Target (TGT) , however, could be betting that the president, who has been known to waver on decisions, ultimately decides to reinstate the exemption. RetailWire's community of retail experts seemed skeptical at this being a good idea for Target. "Why this, why now? I can't imagine this is Target's next best move when it arguably hasn't maxed out opportunities with its online marketplace and with so many unforced errors still to be sorted out. I feel a major distraction coming when Target is least prepared to manage it," wrote Carol Spieckerman. Frequent contributor Paula Rosenblum was even more harsh. "I can't figure out what has happened to Brian Cornell's judgment. He was doing so incredibly well. But the past year has been noted as misstep after misstep," she posted. Retail expert Neil Saunders also thinks that direct factory shipping does not make sense for Target. "Target arguably has bigger fish to fry than this. There is also a point to be made that, if not executed carefully, this could cannibalize mainstream sales at Target," he shared. Related: Walmart exec sounds the alarm on concerning customer trend Mohamed Amer had a more nuanced approach to what Target should do. "The elimination of the de minimis exemption creates significant headwinds for Target's factory-direct ambitions. But the real question isn't regulatory - it's strategic: what customer problem does Target think it's solving?" he wrote. "Target's strength has always been curated discovery through edited assortments-the antithesis of the factory-direct approach's overwhelming catalog. Customers choose Target for the intersection of design, accessibility, and experience, not endless selection at rock-bottom prices." The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
