Target CEO on earnings, delta impact and supply chain crunch
Target CEO Brian Cornell is confident the big-box retailer will have plenty of merchandise this holiday season, despite industry-wide supply chain complications that have sparked worries that items could quickly sell out of stock.
Target’s inventories were up $2.5 billion in its latest quarter compared with a year earlier, Cornell said in an interview with CNBC’s Becky Quick on “Squawk Box” Wednesday morning. The company has been buying goods early in preparation for a blowout holiday season and cognizant of port delays, heightened transportation costs and other shipping constraints.
“We’re getting access to that inventory, and our stores are at this point ready for the school season, the college season … and we’ll be ready for the holidays,” Cornell said. “We have a lot of inventory flowing our way right now.”
Home Depot has already signaled how hot consumer demand will be for Halloween decorations this year. The home improvement chain, which memorably sold out of a 12-foot skeleton last year, is bringing it back again this year along with a new version of the hot item. On Tuesday, the retailer said it sold through an early drop of decor almost immediately.
Walmart also this week tried to quell analysts’ fears around looming supply constraints.
John Furner, president and chief executive officer of Walmart’s U.S. division, said during a conference call that the big-box retailer has been proactively chartering shipping vessels and already secured capacity for the third and fourth quarters. Walmart’s inventories in its latest quarter were up 20% year over year, he said.
“Our consumers are excited about the holiday season,” Cornell told CNBC. “They’ll be cautious, but they want to get together with friends and family.”
Target shares were falling less than 2% in premarket trading Wednesday, while Walmart’s stock dropped less than 1%.