SAN DIEGO--(BUSINESS WIRE)--The Class: Robbins LLP informs investors that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Target Corporation (NYSE: TGT) common stock between August 18, 2021 and May 17, 2022, for violations of the Securities Exchange Act of 1934. Target is a major retailer of five "core" product categories – apparel, food and beverage, essentials and beauty, home, and hardlines.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Target. Shareholders who want to act as lead plaintiff for the class must file their papers by May 30, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: Target Corporation (TGT) Misled Investors Regarding its Business, Operations, and Prospects
According to the complaint, during the class period, defendants boasted about Target's "balanced" assortment and how the Company was "leveraging guest insights" to enhance the assortment and adapt to the rapidly changing consumer trends. However, contrary to defendants’ statements touting the flexibility of Target’s purported “durable” business model and “balanced assortment,” defendants were aware that Target’s strategy of buying early had resulted in the Company over-purchasing goods that were no longer in demand.
As such, defendants failed to disclose the following adverse facts pertaining to Target’s business, operations, and prospects: (i) Target’s strategy for mitigating supply-chain constraints by over-ordering inventory had severely limited the Company’s ability to timely respond to evolving consumer behavior; (ii) as a result, the purported “massive influx of insights” gained from the extraordinary heightened demand during the pandemic could not be leveraged by Target to react to rapidly changing trends; and (iii) as a result of Target’s inability to timely react to changes in consumer trends, Target’s sales declined and the Company was left with an overabundance of inventory, forcing Target to take large markdowns, and severely impacting the Company’s financial results.
On May 18, 2022, Target released its Q1 2022 earnings, revealing it had missed profit estimates and that its operating margin was "well below expectations, driven primarily by gross margin pressure reflecting actions to reduce excess inventory…" On an earnings call that same day, defendants revealed that gross margin for the quarter was down nearly 4.3%, with approximately 3% of the decline due to "the combined impact of impairments, markdowns, and other actions taken to rightsize our inventory position in categories that were too heavy…" After this and other revelations, Target’s stock price declined $53.67 per share, or nearly 25%, from a close of $215.28 per share on May 17, 2022, to a close of $161.61 on May 18, 2022.
Contact us to learn more:
Shareholder Information Form
About Robbins LLP: A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. To be notified if a class action against Target Corporation settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
Attorney Advertising. Past results do not guarantee a similar outcome.